The Kaduna State government on
Friday claimed that the Senate’s rejection of its request for the World Bank
$350m loan elevated the ego of some of its members above the demands of public
policy.
Addressing newsmen in Kaduna, the
state commissioner of finance, Suleiman Abdu Kwari, said, “As the three
senators from Kaduna State spoke, it was apparent that they have put their
personal frustrations above the right of the people of Kaduna State to decent
investment in human capital development through good schools and hospitals, and
better quality of life and accelerated economic growth through the provision of
infrastructure.”
The Senate had on Thursday
rejected the request by the Kaduna State Government to obtain a $350m loan
already approved by the World Bank.
The rejection was based on the
recommendation of the Senate Committee on Local and Foreign Debts and supported
by the three senators from the Kaduna state who are not in good terms with
Governor Nasir el-Rufai.
The state government, however,
commended the House of Representatives for its kind endorsement of the loan
request.
Kwari explained that the All
Progressive Congress, APC, manifesto commits the state government to promote
equality of opportunity by expanding access to education and healthcare, to
support farmers, create pathways for job creation and provide everyone with
land a transparent way to acquire valid title.
The finance commissioner said
under governor Nasir El-Rufai, the state government had implemented financial
reforms aimed at ensuring that the resources of the state were expanded and
applied to delivering services for ordinary people.
According to him, el-Rufai-led
government closed about 470 government accounts and moved all public funds to
the Treasury Single Account, TSA, followed by the introduction of Zero-based
budgeting which helped to infuse realism into the annual budget.
Kwari said, “Since assuming
office in May 2015, the Kaduna State Government has focused on promoting jobs,
social justice and prosperity.
“These aims are being pursued
through programmes aimed at economic development, social welfare, jobs,
security and reforming governance.
“These priorities are captured in
the State Development Plan, 2016-2020, and the foundational document of this
government, the Restoration Programme, the Kaduna State-specific version of the
APC manifesto on which we campaigned.
“We backed these up with legislation
to improve the generation, utilisation and management of government revenues.
“The Fiscal Responsibility Law,
2015, Public Finance (control and Management) Law, 2015, Tax (Codification and
Consolidation) Law, 2015, Public Procurement Law, 2016 and Pension Reform Law,
2016.
“The government also established
a number of new agencies to strengthen the institutional framework for these
reforms.
“KADIPA: for investment
promotion, KADGIS: to manage land and digitise the land registry, KADIRS: the
internal revenue service, to and Kaduna State Bureau of Pension.
“Others are Kaduna State Public
Procurement Agency, KADFAMA. These reforms have ensured that in each of our
full budget years, this government has achieved unprecedented levels of capital
spending.”
Kwari explained further, “For
instance, in 2016, we recorded capital expenditure of N62.2bn. This government
has also doubled the amount it collects as internally-generated revenue. IGR
grew from N13.56bn in 2015 to N23.02bn in 2016, representing a 70% growth. In
2017, IGR reached N26bn. This government
“In 2014 and early 2015, we had
campaigned about the poor state of Kaduna State public schools and hospitals.
As soon as we took office, the problems we had campaigned about became our
responsibility to resolve.
“We were shocked to learn in our
first week in office that at least 50% of our pupils sat on floors because of a
lack of classroom furniture. We also received briefings indicating that apart
from lacking doors, windows, roofs, toilets and water, many of our schools also
had unqualified teachers.”
The finance commissioner noted,
“In response, Governor El-Rufai declared a state of emergency in education and
started to fix schools and buy furniture. After fixing almost 10% of our over
4, 200 primary schools, the government realised that it would need a minimum of
N60bn just to fix primary schools.
“A lot more would be needed to
actually build new schools that can have enough classrooms, staff rooms and
other facilities. There was no doubt that we would need support to raise the
required resources.
“The Governor took an album that
out Budget and Planning ministry had compiled showing pictures of our schools,
and shared it with the federal Minister of Finance, and subsequently, our
development partners, including the World Bank.
“That is how the conversation
that led to the World Bank loan started. The World Bank scrutinised Kaduna
State and they are convinced we meet their standards. We have healthy Fitch
ratings B” Credit Rating with Stable Outlook.In November 2016, Fitch Ratings
assigned Kaduna State a long-term foreign and local currency Issuer Default
Ratings (IDRs) of “B” and a National long-term rating of A+(nga) with stable
outlooks).”
Kwari stressed, “Having checked
our laws, our accounts and our performance, the World Bank was convinced that
Kaduna State merits their support. Therefore, on 20th June 2017, the World Bank
announced that it has decided to provide a budget support facility of $350m to
Kaduna State.
“Our Commissioners have appeared
before the relevant committees of the Senate and the House of Representatives,
and presented detailed explanations for the rationale and the purposes of the
loan.
“Our delegates were commended for
the quality of their presentations. Nobody in those committees of the National
Assembly can honestly claim not to be aware of the justification and the purpose
of the loan. In fact, the House of Representatives endorsed the loan. When our
officials appeared before the Senate, no questions were asked.
“The excuse given on the floor of
the Senate as to the size of the loan is baseless. The creditor and the ratings
agency have adjudged that Kaduna State can sustainably manage the credit which
has a 10-year moratorium and a 40-year repayment period.
“The State average monthly FAAC
allocation for the preceding twelve months is N3.295bn, while our current
monthly debt service is N467.12mn. Also, the monthly debt service forecast of
the FGN Budget Support Facility of N14.169bn with a moratorium of 18months and
World Bank Loan of $350mn with a moratorium of 10years are N191.767mn and
N98.843mn respectively.
“If the State is to repay all
loans today, the total debt service would be N757m representing 23% of total
deductions as a percentage of total allocations. This is less than the
threshold for sub-national borrowing which is capped at 40%. In view of this,
Kaduna State is within the sustainable debt level.
“What the Senate displayed was
elevating the ego of some of its members above the demands of public policy. As
the three senators from Kaduna State spoke, it was apparent that they have put
their personal frustrations above the right of the people of Kaduna State to
decent investment in human capital development through good schools and
hospitals, and better quality of life and accelerated economic growth through
the provision of infrastructure.”
Kwari added, “The Kaduna State
Government is grateful to the House of Representatives for its kind endorsement
of the request. We march on with the task of governing the state, and we shall
continue to enjoy the support of our development partners.”
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