If Kogi State Government is to provide capital infrastructural development throughout the length and breadth of the state, it has to raise bonds from the Capital Market.
Already, twelve states, namely Lagos, Bayelsa, Delta, Ondo, Edo, Osun, Ebonyi, Imo, Kwara, Benue, Niger and Kaduna have done so and are sourcing various amounts of loans ranging from 5 to 50 billion naira to be repaid within five and seven years.
Kogi State which is the latest to join the Capital Market Club is raising 20 billion naira and to be repaid in seven years.
According to the House, the fear that the public may be in perpetual indebtedness from generation to generation does not arise, because the longer the period of repayments, the easier it will be to repay, as long term shall bring about very low interests which will not be harmful to the fund management by the state.
It explained that the loan has been scheduled in such a way that all the local government areas in the state must benefit from any proposed infrastructural project initiated by the state government.
The law makers were of the belief that development could not be achieved at accelerated pace, desired by the public, if it was based on revenue generated internally and periodically by the state. This level of fund insufficiency, the law makers added, had often created a wide gap which could only be abridged by seeking or borrowing funds from external sources to meet these critical and urgent capital development requirements of any government.
The funding gap position among other things, they maintained, was what led to the establishment and development of Capital/Bond Market all over the world of which the Kogi State Government was now partaking.
The House listed extremely needed capital projects to include, road construction, provision and purchase of hospital facilities and equipment, construction of new hospitals, provision of water to the citizenry, construction and provision of educational facilities/equipment, agricultural development and other welfare services like effective environmental sanitation and waste disposal.
These basic needs, according to the law makers, cannot be met easily, if the government is to depend on her resources generated internally from her present cash flows.
The law makers were therefore convinced that the Kogi State Government at the current pace of social and economic development in the state was worrisome and therefore had to go to the Capital Market either nationally, regionally or internationally to borrow fund for the infrastructural developments of all the senatorial districts in the state.
The House then wants the government to implement the projects for which the fund are expected to cover and should also ensure that there is commendable and appreciable distribution of such projects based on equity and fair-play among the component local government areas of Kogi State.