By Jude Onwuamanam, Kaduna  Thursday, 26 Aug 2010     

The Kaduna State Government has completed the processes for the issuance of N8.5bn bonds to enable it to finance some major projects.The N8.5bn bond issue is the first tranche under the Kaduna State Bond Issuance Programme and the fund will be made available to the state government in the next two weeks.

But the opposition party in the state, the All Nigeria People’s Party, has condemned the decision by the state government to raise a total sum of N15bn from the capital market.The ANPP argued that borrowing from the capital market would throw the state and its people into perpetual indebtedness and poverty.

Packaged by BGL Plc as the lead issuing house, with FBN Capital Limited and Standard Chartered Bank Limited as the joint issuing houses, the bond is being offered at N1,000 per unit, payable in full on application. The application opens and closes on August 31, 2010.The 12.5 per cent fixed rate bond matures in the year 2015.

The Kaduna State Commissioner for Finance, Mr. Sunday Katung, said at a completion board meeting attended by members of the Kaduna State Executive Council, Kaduna State House of Assembly, officials of the lead and joint issuing houses and other parties to the offer, that it was being undertaken to enable the state government to proceed with its developmental projects at a faster pace.

According to Katung, N2.3bn of the bond will be for the part payment of the construction of the Zaria Regional Water Supply Treatment plant aimed at providing sufficient potable water for the Zaria town and its environs. He added that N2bn would be spent as part payment for the construction of a 200-bed specialist hospital to be located at the New Kaduna City, currently under construction.

The finance commissioner also disclosed that another N2bn of the N8.5bn bond’s proceeds would go into the construction of the new government house complex, while the construction of the Tum-Madakiya road and the fourth bridge across River Kaduna would gulp about N1bn.Katung added that the sum of N0.53bn of the bond issue would be expended on the construction of the Kafanchan campus of the Kaduna State University.

The finance commissioner further explained that following the problem of dwindling revenue confronting most of the states in the country, “it became necessary that other avenues for raising funds be considered.”The Group Managing Director/Chief Executive Officer, BGL Group, Mr. Albert Okumagba, said that the bond had been fully underwritten.

However, the Chairman of the Kaduna State Chapter of ANPP, Senator Aliyu Mohammed, condemned the planned move by the Governor Ibrahim Yakowa-led administration in the state to borrow for N15bn from the capital market.The Kaduna State House of Assembly had last week passed the bill sent to the lawmakers by Yakowa, seeking their approval to borrow from the capital market.

Source:Punch