The Niger State House of Assembly has clarified that it did not approve a $14.4 million loan-related request transmitted by Governor Mohammed Bago following public criticism and media reports suggesting that the state government was seeking fresh borrowing, Arewa reports.
The clarification came after the governor requested legislative approval for a bank guarantee in favour of the United Bank for Africa under a financing arrangement involving Niger Foods Security Systems and Logistics Company.
The request was disclosed by the Speaker of the House, Abdulmalik Sarkin-Daji, during plenary while reading correspondence received from the governor.
According to the Speaker, the governor sought legislative approval for a bank guarantee valued at $14,445,007.06 under the Saudi EXIM Line of Financing for Niger Foods Security Systems and Logistics Company.
Sarkin-Daji said, “The Governor therefore requested the House to approve a bank guarantee in favour of the United Bank for Africa for a credit facility of $14,445,007.06 under the Saudi EXIM Line of Finance to the Niger Foods Security Systems and Logistics Company. The facility has a tenure of 84 months with an 18-month moratorium.”
The development sparked reactions from members of the public and commentators who interpreted the request as an attempt by the state government to secure a fresh loan despite concerns over public debt.
However, in a statement issued by his media aide, Ruqayyah Tanko, the Speaker said the House merely received and read the correspondence and had neither debated nor approved the request.
“The Speaker explained that, contrary to reports suggesting that the House approved a fresh loan request, the correspondence was merely received and read before members during plenary. He stressed that the House neither deliberated on the matter nor approved the request,” the statement read.
The Assembly maintained that the request before lawmakers was not for the Niger State Government to obtain a loan but for the state to provide a guarantee for a financing arrangement involving Niger Foods Security Systems and Logistics Company.
According to the Speaker, Niger Foods is a separate corporate entity operating as a limited liability company, although the state government remains its largest shareholder.
“He explained that Niger Foods Security Systems and Logistics Company is a separate corporate entity and not the Niger State Government. Although the state government is the largest shareholder in the company, it operates as a limited liability company with its own corporate identity and management structure,” the statement added.
The Speaker further explained that the financing institution required a government-backed guarantee because of the state government’s significant shareholding in the company.
He stressed that responsibility for repaying the facility would rest entirely with Niger Foods Security Systems and Logistics Company.
“The only role of the Niger State Government in this arrangement is to serve as guarantor for the facility. This is why the Executive sought the approval of the Niger State House of Assembly in accordance with the law,” he stated.
Arewa reports that the controversy comes amid increasing public scrutiny of government borrowing at both federal and state levels as economic pressures continue to mount. State governments have in recent years sought various financing arrangements to fund infrastructure, agriculture and industrial projects, often drawing concerns from citizens over debt sustainability and fiscal transparency.
Niger Foods Security Systems and Logistics Company is one of the flagship agribusiness initiatives backed by the Niger State Government as part of efforts to boost food production, processing and agricultural value chains in the state.