The Akwa Ibom State Commissioner for Finance, Mr. Akan Okon, said the N10 billion loan facility guaranteed to Wizchino Nigerian Limited for construction of Etinan- Eyo road was to relieve the already over-stretched purse of government the burden of paying a lump sum for the contract.
Okon, who stated this during a 60 minute interaction on Atlantic Radio, Uyo, said if Government were to fund the project from its coffers it would have gravely affected its ability to meet other obligations.
He said the mode of funding of the project was novel and helped to check extra expenditure that may have arisen from variations in the contract sum at expiration of the contract completion period.
“The facility will offer the State government opportunity to make payment in tranches of N344,209,774.43 at most per month to the contracting firm, Wizchino Engineering Limited, instead of making lump sum payment thereby ensuring that the project is completed on time and also freeing funds for other uses on monthly basis”.
“In the face of dwindling cash flow, and phenomenal increase in prices of contract, we had to guarantee a loan in the amount the State would have paid as a lump sum. This has relieved pressure on government purse and has saved extra cost from price variations over a period”.
“This idea is novel and it is good for project financing especially funding infrastructure”.
The 29km Etinan-Ndon Eyo Road, awarded to Wizchino Engineering Limited by Mr. Emmanuel’s administration, connects Etinan with Onna Local Government Area in Akwa Ibom Stat .
The finance commissioner said the government has extended its tax net to capture more people who were not hitherto captured in the net.
“We have taken steps to increase the number of people within our tax net. It is believed that if leakages in the system are plugged, we will boost our IGR. What we’ve done first was to change manual receipts on government transactions to e-receipts and this has paid off”.
He said revenue consultants contracted by government have improved tax services of the State, added that the contractors were not work at cross purposes with internal revenue staff in the State as alleged.
“The consultants and IRS staff are working together. Tax collection contractors are not taking the sheen off the internal revenue service staff. The tax consultants have brought in technological expertise that has made tax collection more convenient. Now you can pay tax from your home. The days for long queues at points of payment of tax are gone”.
On managing outstanding debt accruing from previous administration, Mr. Akan Okon said the State government owed Commercial Banks N64.5 billion as at May 29,2015 when Mr. Udom Emmanuel took over as Governor.
“The State owed N64.5 billion. The debt servicing obligation was to the tune of N3.5 billion per month. We would not have survived under such repayment regime.
So an opportunity presented itself and we converted the debt to CBN bond. So instead of paying N3.5Billion per month, we will be paying about N850 million through a period of 20 years. Nevertheless, the debt sustainability analysis of Akwa Ibom is under 10 per cent”.
