The decision of the Oyo State House of Assembly to approve a loan request of N2 billion by Governor Seyi Makinde has received a knock from the main opposition party, All Progressives Congress (APC).
The Oyo State House of Assembly on Thursday approved a loan request of additional N2bn from the Fidelity Bank Plc at a concessional interest rate of 12percent per annum and a repayment period of 12months.
The facility is required to provide and finance counterpart fund for Donor Assisted Projects across the State.
The request was contained in a letter forwarded to the Speaker, Hon Adebo Ogundoyin by Governor Seyi Makinde and read at the plenary on Thursday.
Hon. Ogundoyin noted that it was imperative and expedient for the Oyo State Government to fulfill its own part of the project agreement so as to ensure speedy completion of the projects.
According to the letter, ” In a bid to further compliment the State Government’s efforts on the provision of critical and iconic infrastructure and very laudable projects across Oyo State , the Executive Council is seeking the approval of the State House of Assembly to access additional N2bn facility to provide counterpart funding to complete donor assisted projects ”
“The facility is to be accessed from Fidelity Bank Plc at a concessional interest rate of 12percent per annum with a repayment period of 12months and management fees of 0.25percent one-off,”
The projects included Nigeria Covid-19 Action Recovery and Economic Stimulus, Accelerating Nutrition Results Project in Nigeria, Ibadan Urban Flood Management Project, Better Education Service Delivery For All and the UBEC/SUBEB 2021 Matching Grant.
Meanwhile, the main opposition party in the state, All Progressives Congress (APC) has condemned the state’s rising debt profile under Governor Seyi Makinde-led administration.
The party Chairman, Hon. Isaac Omodewu, in a reaction made available to pressmen in Ibadan on Thursday, described the fresh loan request as an act of wickedness and recklessness on the part of the state governor, Seyi Makinde.
He wondered why an administration that regularly lists the improvement of the state’s IGR from N1.7bn to N3.3bn as one of its sterling achievements and executes many of the projects it claims on a public private partnership arrangement, would need to rely on domestic borrowing to pay salaries.
Omodewu noted that salary payments being a recurrent item on the state budget should never have been financed by loans, especially a domestic loan for that matter, considering that the most basic of economic practice and wisdom dictates that loans should be taken to finance capital projects. Such naive and fundamentally inept economic policy can only lead Oyo State into insolvency and economic depression if not immediately stopped.
He disclosed that Oyo State is already ahead of Osun, Ondo and Ekiti states with her N141,193, 578,346.57 domestic debt burden, according to the domestic debt data for the 36 states of the federation and the Federal Capital Territory released by the Debt Management Office of the Federal Republic of Nigeria as at March 20, 2022.
“We are still shocked as a political party to hear that Governor Seyi Makinde has obtained approval to take an additional N2bn loan from a domestic source at a concessional rate of 12 per cent per annum and a repayment period of 12 months as well as a N3.5bn overdraft to pay salaries despite claims of increased internally generated revenue and the deployment of public private partnership arrangements in financing many of the projects being undertaken. This is particularly appalling as many of the projects financed by the numerous loans remain unfinished and inconclusive.
“It is thus saddening and shocking that the Oyo State economy has been pushed to the point where overdrafts are being taken to pay salaries while billions are wasted monthly on powering streetlights with diesel generators after the removal of cheaper and environmentally-friendly solar powered street lights.
“Apart from routine contracts inflation, borrowing is another Makinde’s way of siphoning funds for his already-failed second term bid.
“It’s regrettable that the PDP-dominated Oyo State house of Assembly is only active when they are financially-induced to approve Governor Makinde’s loan requests. We hereby advise the lawmakers to stop acting as rubber stamps. They are expected to serve as checks and balances for the executive arm of the government, instead of routinely serving the governor’s selfish whims.”
Omodewu, therefore, cautioned Governor Seyi Makinde on the rising Oyo State debt profile, advising him to instead re-jig his economic policies and repurpose the improved internally generated revenue he constantly claims, instead of mortgaging the future of Oyo State.
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