- Assures Loan Won’t Strain Finances, Outlines Broad Repayment Plan
By Amos Aar
THE BENUE State Commissioner for Finance and Economic Development, Hon. Michael Oglegba, has said that the ₦100 billion loan recently secured by the administration of Governor Hyacinth Alia will not be repaid solely through the state’s Internally Generated Revenue (IGR).
Oglegba, who made this known while fielding questions from journalists in his office on Tuesday said the state has designed a broad repayment plan that includes proceeds from the Federation Account Allocation Committee (FAAC), Value Added Tax (VAT), and other special revenues.
According to him, the loan is structured in such a way that it would not affect the state’s cash flow or hamper ongoing development projects.
Asked what was his view on the ₦100 billion loan secured by the Alia administration to be repaid over 48 months, considering the 2024 performance of the Benue Internal Revenue Service (BIRS), which generated ₦20.43 billion and ranked Benue 32nd among 36 states according to FIRS, he said “the source of repayment for the loan is not strictly internally generated revenue. We are using proceeds from FAAC, special revenues, VAT and all that as part of the repayment plan.
“So, this does not affect our cash flow. The funds are going to be invested in things that will stimulate economic activity and generate extra revenue. It’s built into the loan structure, and the state will repay comfortably,” he said.
The commissioner described the loan as part of a broader economic recovery strategy aimed at rebuilding the state’s financial stability and funding critical infrastructure to spur growth.
Oglegba revealed that when the Alia administration assumed office in 2023, Benue ranked lowest in the country on fiscal responsibility indicators, with high debt levels, unpaid salaries, and minimal capital spending.
“We met a dismal financial situation. The state owed over ₦187 billion, while local governments owed another ₦170 billion, totaling over ₦350 billion in debt. Less than five percent of our income was spent on capital projects,” he said.
He explained that since 2023, the administration had focused on reducing debt and restoring fiscal discipline, adding that recent reports from the Debt Management Office (DMO) showed a significant drop in the state’s liabilities.
“For the past two years, we’ve not borrowed a single dime. This is the first time we have embarked on borrowing, and that’s because we now have room to do so after reducing our debts and improving our finances,” he noted.
Oglegba maintained that the new borrowing is a calculated decision to finance key projects that would generate long-term economic value for the state, including industrial ventures and road infrastructure.
“Government’s job is not necessarily to set up companies but to create the environment where private businesses can thrive,” he added. “However, because of our peculiar situation, government has directly invested in certain companies like the new juice factory and cottage industries under BIPC to stimulate the economy.”
He assured that the state remains financially stable and capable of meeting its obligations, including repayment of the new loan, while maintaining capital investments to drive development.
