Kano refutes paying N1.3b overdraft interest to commercial banks

Amid allegations of financial indiscipline and recklessness, the Kano State Government has refuted claims that it paid some commercial banks the sum of N1.3billion to service interest charges on overdraft facility secured recently.

Governor Abdullahi Umar Ganduje was recently accused on the social media of embarking on conventional loan to pay workers salaries, which they claimed attracted over N1billion interest for just three days, an action, his antagonists considered irrational.

But in a swift reaction at the weekend, the State Commissioner for Finance, Prof. Kabiru Isa Dandago, insisted the allegation was not only malicious, but also a fabricated story meant to mislead the good people of the state.

Refuting the claims, the Commissioner told journalists at a conference that “there was no time Kano State Government obtained any conventional loan let alone given any bank such outrageous amount.”

Clarifying further, Dandago clarified, “what government accessed was overdraft facility of N4.5billion meant to settle workers salaries for the month of June, 2017, to enable them celebrate Sallah festival since the Federal Government allocation did not come in good time.”

He insisted that the overdraft facility granted by two money deposit banks attracted N10.7million only against the alleged N1.3billion.

According to the Commissioner, the overdraft facility was accessed to facilitate payment of workers’ salaries pending when the state accessed the monthly Federal allocation.

“The facility accessed was meant to pay salary June alone not May andJune as alleged. We did that in anticipation of the state allocation from the Federal Government that would hope should drop in less than seven days. But the amount drop into the state account within three days. So the interest rate was for three days.”

“The amounts accessed are equal to the state and local governments’ workers’ salaries, allowances and other payments, which was put atN4.5Billion. The fund was taken from two banks – one bank gave us 14per cent interest charge on N4.5billion, and the second bank has 15per cent interest charge on N4.5Billion. If you multiple the figures you will have N10.7million cumulatively as total interest charges.

Again what government paid was N10.7million not N1.3Billion,” Dandago explained.

Expatiating further, his counterpart from the Information Ministry, Muhammad Garba, noted that the state government ought to have been applauded for the kind gesture of placing utmost priority on workers welfare instead of embarking on mischievous venture.

Mohammad said: “let me put this on record, the state executive council has approved access of overdraft in any occasion or circumstances that will delay worker’s salaries beyond 25th of the month. This facility the government has found efficient and would continued to use to make easy the socioeconomic status of our people.”