The All Progressives Congress APC in Oyo state has described the fresh loan request as an act of wickedness and recklessness on the part of the Governor, Engineer Seyi Makinde.
Oyo State APC Chairman, Hon. Isaac Omodewu in a reaction made available to pressmen in Ibadan on Thursday, condemned the state’s rising debt profile under Governor Seyi Makinde-led administration.
The reaction followed recent request by the state governor’s administration for a new N2bn loan facility from Fidelity Bank PLC at a concessional interest rate of 12 percent per annum.
The Oyo State APC 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.
The party 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.
The party also noted 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.
The statement reads in part, “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 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 lights with diesel generators after the removal of cheaper and environmental-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.”
The statement concluded by cautioning Gov. Makinde on the rising Oyo State debt profile, advising him to instead rejig his economic policies and repurpose the improved internally generated revenue he constantly claims, instead of mortgaging the future of Oyo State.