The Akwa Ibom State government has admitted its indebtedness to commercial banks to the tune of N64.5bn.
The Commissioner of Finance, Mr. Akan Okon, who disclosed this in Uyo, the state capital on Tuesday, spoke on the desirability of converting the state’s debt to Federal Government bonds.
The disclosure by the government came on the backdrop of criticisms by civil rights groups and the All Progressives Congress, which asked Governor Udom Emmanuel to make public the state’s debt profile.
The commissioner explained that Akwa Ibom was only taking advantage of the window of opportunity the Federal Government has offered to convert the N64.5bn debt owed commercial banks to bonds.
According to Okon, the governor, being a finance expert, has adopted the financial engineering method to “free more funds to finance development and other basic services for the state”.
He said, “Whereas Akwa Ibom State was paying N3.6bn monthly to service her loans – going by the short term instruments of such loans – the Federal Government’s bond with long term financing will reduce the payment to a mere N300m a month.
“This will free about N3bn for developmental projects. We wrote to Akwa Ibom Assembly to seek approval”.
“This is one of the requirements from the Debt Management Office for the state to enjoy the approval of benefitting from the FG’s bond facility”, he added.
Okon stated that the repayment of the debt would last 20 years, but that it won’t choke the state.
He also dismissed rumours that the Akwa Ibom State government had barred other commercial banks from operating government accounts.
The Commissioner for Information and Communications, Mr. Aniekan Umanah, who was also part of the press briefing, reiterated Gov. Emmanuel’s commitment to consolidate the developmental strides in the state by completing ongoing projects.