By TONY NYONG

THE Akwa Ibom State government said it was borrowing $500 million (about N80 billion) from London Standard Chartered Bank International to settle the outstanding of a N50 billion loan it earlier took from United Bank for African (UBA).

Addressing newsmen in Uyo, the state capital, following criticisms trailing the government move, the State Finance Commissioner, Bassey Albert, explained that it is more productive to borrow at the international market than borrowing at the local market.

He said that the state government secured the loan from UBA at an interest rate of 18.5 per cent per annum while Standard Chartered Bank International is offering 8.1 per cent interest rate per annum. “It is good to state that when a government borrows, it is not that the government is broke.

You are borrowing to finance your cash flow because if you have to depend on your monthly allocation it means most of the projects would not have been completed. We have run this state for five years without borrowing a dime from any bank.

We have also run this state for five years and have paid back every simple bankable loan that we inherited from the immediate past administration in the state. We have also run this state for five years and we have cleared every liability in terms of contractual liabilities that we inherited from the past administration.

“I think it is something we should talk about that if the governor has achieved this much he has achieved in the past five years without a single bank loan, I think he should be commended. As I am talking to you by May this year, once the government approves, we would start the commissioning of over 700 projects spread across various local government areas in the state.

When we consummated the UBA facility, we were also working with international financial institution because the real essence is to bring governance at the cheapest rate to the people. We were also working based on the interest that was shown by the international financial institution based on the performance of the governor.

The UBA facility was meant to be a stop gap because borrowing from local market was far easier than borrowing from international market. Also, the UBA facility was a double digit facility at 18.5 per cent interest rate per annum while at the same time we are also working with international bank where the interest rate is about 8.1 percent interest rate per annum. The UBA facility was a bridge to support the state as at the time it came,” the commissioner stated.

In his own explanation, Speaker of Akwa Ibom State House of Assembly, Sam Ikon, said lawmakers had earlier approved the N50 billion UBA loan to assist the executive arm to complete ongoing projects in the state.  He commended the executive arm of government on fiscal discipline, noting there was a provision for a loan of N65billion loan in the budget but the house only approved N50 billion.