The Niger State House of Assembly has received a letter from Governor Farmer Mohammed Umar Bago, requesting approval for a N65 billion loan from commercial banks.
The funds are intended to enhance the agricultural and educational sectors of the state.
Presented during Tuesday’s plenary session after the assembly’s one-month recess, the letter addressed to the Speaker, Hon Abdulmalik Sarkindaji, outlines the governor’s plans to secure a N50 billion Agricultural Financing Facility from Union Bank PLC.
This facility aims to establish an Agricultural Food Park and Farm Estate, supporting the state’s Green Economy Revolution and creating value chains for farm produce to ensure food security for Niger State and Nigeria as a whole.
Sarkin-Daji explained that the N50 billion loan would enable Niger State, chosen by the Federal Government as a pilot for the 2024 dry season farming programme, to receive a grant of N200 billion. This grant would help the state offset the proposed loan.
The letter specifies that the N50 billion loan facility would be backed by an irrevocable payment Standing Order (ISPO) issued by the Niger State Government in favor of the bank. It would carry a management fee of 1 per cent (One-off) and an interest rate of 20% per annum, repayable in 106 monthly installments, including a 24-month principal moratorium and a three-month interest moratorium.
The benefits of the N50 billion facility offered by Union Bank PLC include financing the Niger State Food Security System and Logistics Company Limited through the establishment of agricultural food parks and farms.
It is also expected to enhance self-sufficiency in agriculture, facility maintenance, direct labor interventions, food security, boost the state’s Internally Generated Revenue (IGR), and provide communities with water supply, health, and education facilities.
Additionally, the Governor seeks approval for a N15 billion contract financing facility from Fidelity Bank PLC for the Engr. A. A. Kure University of Education, Minna Niger State.
The repayment of this facility is proposed through a 60% deduction from the state and a 40% FAAC allocation from the 25 local government areas.
The state is also expected to receive an additional N100 billion loan facility from Fidelity Bank/Afrexim Bank, which could help offset the N150 billion loan together with the initial N150 billion taken by the immediate past administration of the state.
The letter has been forwarded to relevant house committees for scrutiny and possible approval, with a one-week deadline to report back to the house.
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