Amidst fears of repayment schedule and interest rate, the Niger state House of Assembly has refused the request of the state Governor, Alhaji Abubakar Sani Bello to take N21.5 billion Sukuk bond. The House resolution which was unanimous was informed by the report of a Special Committee on Sukuk Bond request chaired by Honorable Abdul Malik Kabir representing Paikoro constituency that the contingencies, professional fees, underwriting and consultancy fees inclusive of the 17 per cent interest rate was high.
The report indicated that by the end of 7years that the bond was expected to have been repaid in which a total of over N10 billion would have been deducted as interest while the monthly deduction from the FAAC would be N255 million,the committee in their report concluded thus , ‘’these charges and fees are considered too much.’’
Kabir while presenting the report added that at the end of the seven years repayment period, the state would have paid N31.5 billion for the N21.5 billion SUKUK bond as being proposed by the executive.
The committee noted that with the state debt profile at N57.9 billion, if the government was allowed to take the bond, it would put the state into financial comatose.
According to Kabir, “With the payment of N750 million monthly as debt services, N255 million which would be the monthly deduction for the repayment of the Sukuk bond would be too much for the state to bear monthly. “In view of our observation, the committee recommend that the request to secure a N21.5 billion Sukuk bond by the state governor should not be granted,” he added.
In his contribution, the member representing Rafi constituency, Honorable Danlami Bako observed that the projects to be undertaken under the Sukuk bond are priority projects, adding that the trailer park and the mining city project were not viable. In another position,the member representing Kontagora II, Honorable Nura Garba recommended that the request should not be totally thrown away but should be reconsidered should the executive renegotiate the terms of the bond with Sukuk. They all however agreed with the report of the committee rejecting the request through a voice vote as the Speaker of the House of Assembly, Honorable Ahmed Marafa directed the Clerk, Abdullahi Kalgara to communicate the decision of the house to the executive.
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