- Debt still within our capacity to pay – Govt
- It’s not sustainable – Economic analyst
Following the recent report released by the National Bureau of Statistics, putting the debt owed by the Osun State Government at N179billion, a civil society group and a budget historian have carpeted Governor Rauf Aregbesola, accusing him of dragging the state into dire financial straits.
The NBS, in its June 2017 report, put both the internal and external loans, bond and other credit lines obtained by the state government to N179bn ($96, 347, 432, 73 and N147, 069, 973, 626.49). But this figure sharply contrasts with the initial claims by some members of the opposition and groups that the state was indebted to the tune of N600bn, N450billion and N400billion, respectively, at different periods.
According to the Civil Societies Coalition for the Emancipation of Osun State, Aregbesola had borrowed beyond the state’s capacity and thus mortgaged its future.
The group also alleged that half of the accumulated debt being acquired from foreign and local financial institutions from 2012 to 2014 were repatriated to Lagos.
CSCEOS Chairman, Mr. Adeniyi Sulaiman, in a chat with our correspondent, argued that the state’s debt profile was not sustainable, pointing out that “Aregbesola has destroyed the state beyond redemption and only divine intervention can save it from future financial crisis.”
Speaking in the same vein, a budget historian and economic analyst from the Faculty of Arts, Obafemi Awolowo, University, Ile-Ife, Mr. Tunji Ogunyemi, said, “Osun’s debt is not sustainable; the state is in dire straits. Governors, including Aregbesola, rely on borrowing to pay salaries. Except the governor has been doing some miracles, I don’t think Aregbesola is a miracle worker. Sukuk loan doesn’t mean free loan.
“Osun is still going to pay. Governors are too optimistic on the Federation account, Osun and Ekiti, especially. I don’t envy Aregbesola’s successor at all. So, I would advise the electorate not to use sentiments in choosing the next Osun governor.”
On the way out, the expert advised the governor to rely less on Federal allocation and work on improving the state’s internally generated revenue, saying, “Governor Aregbesola should focus more on how to assist farmers. Look far away from oil. I see infrastructure in Osun helping in the future. Do rural roads or grade them regularly, you may not tar them.
Another economic expert, Mr. Segun Adeniyi, accused the governor of contributing immensely to the huge debt the state had recorded.
Osun’s debt is not sustainable
He said, “We (Osun) borrowed money to demolish a lot of schools in Osun and we borrowed money to build few mega structures that are still not yielding any positive result. Osun can’t repay the huge loans that it has presently. Aregbesola met N7.6billion left by Oyinlola in the state government’s account but what has he done with it?”
But the government insisted that the state still had the capacity to repay its debt.
The Commissioner for Information and Strategy in the state, Mr. Adelani Baderinwa, noted that the debt was still within the capacity of Osun to pay back in a normal economic situation.
He added that the government had been servicing its debts without public knowledge before the last economic recession set in.
Baderinwa said, “The debt profile of the State of Osun, released by the National Bureau of Statistics, has vindicated the government’s position on how much is owed and on the blatant lies and blackmail of the opposition, who were arbitrary and unreasonable in vomiting irresponsible figures with a view to maligning the government.
“The state government wishes to note that the totality of N179billion includes all loans and all other debt instruments obtained by all administrations that have ruled the state since its creation and those inherited from the old Oyo State.”
He stated, “But for the sudden drop in the Federal allocation, which was as a result of the mismanagement of the country’s resources and brazen corruption by the PDP-led Federal Government, the state would have continued to run without any noise and financial stress as it has been doing.
“It will be recalled that the State Government of Osun has always been stating that no creditor will grant loan facility that cannot be redeemed by the borrower.”
