Otti clears air over S125m Islamic bank loan

.Says facility purely for development purposes, devoid of religious ties

By Steve Oko

Governor Alex Otti of Abia State has explained that the $125 million loan facility the Federal Government recently approved for Abia, was purely for development purposes, and had no religious connotations whatsoever, contrary to misconceptions and insinuations in some quarters.

The Governor who made the explanation while responding to a question during a media parley in Umuahia, disabused the minds of those insinuating religious attachments to the facility.

Otti promised that the facility would be judiciously utilised on the projects for which it was procured, saying his administration is prudent in management of resources.

He said:”Now, you are worried about the $125 million billion dollars. You are worried that it is coming from Islamic Development Bank? I don’t think there’s any need for worry.

“You know money doesn’t have colour. Whether it is coming from the devil, or coming from heaven. The important thing is to use the money for the purpose. So, that is what it is. It is Islamic Development Bank.”

The Governor, however, added that the Commissioner for Finance, would be providing detailed information about the loan facility in the days ahead.

” I believe that the details will be made clear by the Commissioner for Finance at the appropriate time. There is nothing to worry about. The conditions are very generous. By the time I looked at the conditions, I was utterly surprised.”

Gov. Otti said the only thing to worry about was the unstable exchange rate of Dollar to Naira.

“What we are usually worried about is what happens to exchange rates. That is always my worry. If the money was borrowed prior to May 2023, the exchange rate at that time was under N500. Today, it is now longer the same.”

On reports that some civil servants and retirees were still having issues with their salaries and pensions, Otti advised the affected persons to engage the Commissioner for Finance to sort out the cause, assuring that the fund for their payment remains intact.

Recall that the Federal Government had during Wednesday’s Federal Executive Council meeting, approved $125 million Islamic Development Bank financing facility for the Abia State Integrated Infrastructure Development Project.

Otti had earlier in a statement by his Chief Press Secretary, Ukoha Njoku Ukoha, said that the approval “marks a major milestone in a project that has undergone extensive consultations and procedural steps, and is a critical component of the overall co-financing arrangement for the State’s ambitious infrastructure development drive.

“This landmark project will complement his administration’s ongoing infrastructural development initiatives, aimed at modernizing Abia’s transportation network, revitalizing urban centres, and positioning the State as a hub for sustainable economic growth.”

The statement further stated that:“The project’s total cost is USD 263.80 million, comprising of USD 125 million from the Islamic Development Bank [ IsDB], USD 100 million from the African Development Bank (AfDB), USD 15 million from the Canada–Africa Development Bank; and USD 23.80 million counterpart funding from the Abia State Government.”

“The IsDB facility is particularly significant because its financing agreement must be signed for the project to proceed, given the integrated nature of the co-financing structure. The AfDB and Canada–Africa Development Bank financing agreements have already been concluded, with the AfDB loan agreement signed earlier this year.”

According to the statement, “Under the project, the IsDB financing will support the construction of approximately 126 kilometres of road network in Aba and 35.57 kilometres in Umuahia, including a link road between the two cities, as well as critical erosion control works within the project sites.

“When completed, the project will reduce travel time in Abia’s busiest urban corridors; create over 3,000 jobs for local residents; reduce greenhouse gas emissions, improve access to social services; and attract private sector investment.”

“The project is owned by the Abia State Government and will be executed through the State Ministry of Works, under the supervision of the State Steering Committee. The Steering Committee will provide policy direction to the State Project Implementation Unit (SPIU) and all stakeholders.

“Procurement for the IsDB-financed components, covering civil works and consultancy services, will follow the Bank’s procurement guidelines, with disbursements made directly to contractors and consultants. This milestone follows sustained engagement and intergovernmental coordination”, the state government said.

“This approval is also a direct complement to the visionary infrastructural development agenda of the administration. Since assuming office, the governor has made the modernization of Abia’s road networks, the revitalisation of urban centres, and the integration of sustainable development principles a cornerstone of his administration.

“The IsDB facility will strengthen these ongoing efforts, accelerating the pace of road reconstruction in Aba and Umuahia, addressing critical erosion challenges, and laying the groundwork for an integrated transportation network that supports commerce, improves quality of life, and enhances the state’s competitiveness.”

Otti commended President Bola Tinubu for for making it easy for the state to access the loan facility.

“ We thank President Bola Tinubu for his trust and pragmatic leadership; the National Assembly, for approving the borrowing plan; the Honourable Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun, for his leadership in concluding the financing process; Secretary to the Government of the Federation and Attorney General of the Federation for their roles in facilitating the process; and the VP IsDB, Dr. Mansur Muhktar who not only reached out in November 2023, but saw to it that internal approvals were received on the request for the facility”.

The post Otti clears air over S125m Islamic bank loan appeared first on Vanguard News.