The Niger State House of Assembly on Tuesday rejected the request by the State Governor, Abubakar Sani Bello, to take N21.5 billion Sukuk bond.
The assembly, which cited very high interest rates and other “hidden charges” that would tie the state down for several years, took the decision at plenary when it received the report of its special committee on Sukuk bond headed by Alhaji Abdulmalik Kabir.
Presenting the report, Kabir said the “management fees, contingency, professional fees, cost of underwriting and consultancy fees inclusive of the 17 per cent interest rate which is to the tune of over N10 billion, is on the high side, these charges and fees are considered too much.”
He added that the monthly deduction from the FAAC would be N255 million, submitting also that “at the end of the seven years repayment period, the state would have paid N31.5 billion for the N21.5 billion bond.”
Kabir said the committee discovered also that the interest of 17 per cent would translate to N8.9 billion, other fees and expenses would amount to N431 million while the professional fees would total N939 million.
He said the committee was of the opinion that, with the state debt profile standing at N57.9 billion, “if the government is allowed to take the bond, it would put the state in financial comatose.”
According to him, “With the payment of N750 million monthly as debt services, N255 million which would be the monthly deduction for the repayment, the Sukuk bond would be too much for the state to bear monthly.
“In view of our observation, the committee recommends that the request to secure a N21.5 billion Sukuk bond by the state governor should not be granted.”
Debate on the committee’s report was heated and lasted several hours.
The member representing Rafi constituency, Alhaji Danlami Bako, during the debate, also observed that listing of the projects to be undertaken under the Sukuk bond showed some misplaced priorities, adding that the “trailer park and the mining city project are not viable.”
Member representing Kontagora II, Alhaji Nura Garba, recommended that the request should not be totally thrown away but be reconsidered should the executive “renegotiate the terms of the bond.”
When the issue was put to vote, majority of the lawmakers agreed that the request should be rejected, and as a result, the Speaker of the assembly, Alhaji Ahmed Marafa, directed the clerk, Alhaji Abdullahi Kagara, to “relay the decision to the executive.”
Some state and federal lawmakers among them, Senator David Umaru, including the opposition Peoples Democratic Party (PDP), had risen against the request and asked the assembly to reject it.