Kogi: N500m monthly loan servicing makes it hard to pay salaries regularly

The Kogi state government says it is unable to pay salaries regularly because of the N500 million loan servicing bill it has to settle monthly.

In an interview with NAN on Sunday, Kingsley Fanwo, the state director general, media and publicity, said the loans were taken by the two previous administration for projects that did not add value to the state.

“Sometimes, we repay between N400 million and N500 million monthly as loans that add no value to the state,” he said.

“These loans were taken by the last two administrations and some of them were invested in projects that were never completed.

“When you go out, you will see Kogi Hotels, billions of naira was collected for that project and it was not completed, and it is not adding any value to the state.

“Also, the Kogi House in Abuja has gulped billions of naira, yet, it is not completed, not adding any value to the state.”

According to Fanwo, the previous administration misused the N20 million it received from the Central Bank of Nigeria (CBN) for the development of small and medium scale enterprises (SMEs).

“There is no record of anybody given loan and now we are repaying. So all of these have taken its toll on the resources and finances of the state,” the DG said.

“We cannot shy away from the fact that the resources that are coming to the state now have dwindled due to the loans we are repaying.

“It is increasingly difficult to muster enough resources to pay salaries regularly. As I speak with you, we are still owing March and April salaries.

“When you do a comparative analysis of wages in the north-central geopolitical zone, Kogi pays the highest and despite that, we have been very faithful.”

He said statements about the state owing 24 months salary are false adding that the bailout funds received have been used to pay salaries.

“The bailout funds were not gifts from the federal government, it was more or less a loan, so you have to prioritise what you use your bailout funds for.

“So, we used it basically for salaries and we were the only state in the federation that published how we used that bailout funds.”

In the March federation account allocation committee (FAAC) report released by the National Bureau of Statistics, Kogi state paid N600 million of its monthly allocation on external debt, contractual obligation and other deductions.