Following the backlash that greeted the issuance of the N100 billion bond by the Oyo State government, Governor Seyi Makinde, has disclosed that the only way the state could break the jinx of infrastructural deficit was to take loans.
The governor made the disclosure on Wednesday, July 29, 2020, while singing into law, the state’s revised 2020 appropriation bill, held at the Government House, Agodi, Ibadan.
Makinde’s rebuttal came on the heels of the war of words from the opposition on the approval of the governor for the issuance of a N100 billion private bond tagged: “Oyo Prosperity Bond” to facilitate the execution of priority projects that would further drive economic development in the state.
He hinted that the fund would be raised in two tranches of N50 billion each for the construction of the 50 kilometre Iseyin-Ogbomoso road, the Ibadan Circular Ring-Road and Ibadan Airport upgrade.
According to him, the fund would also cover the development of Ibadan Dry Port and rail corridor, adding that the development would serve as economic hubs of the state.
Makinde hinted at the singing of the revised budget that the problems with loans was not about taking them, but the way the loans are utilised remained the important aspect of accessing such loans.
His words: “I have always said the problems with loans is not about taking them, but the way the loans utilised. Oyo State cannot get out of its infrastructural deficit without taking loans targeted at developing key infrastructures.”
“I make bold to say, people are listening to me that served in the previous administration, in eight years, all the roads constructed or expanded were not up to 40km. We don’t want the same story at the end of tenure of this administration.
“Oyo State cannot attract investment into her economy without showing that we are worthy of these investments. How can we despite being in this dire condition not recognising the urgency of growing our economy.”
“Somebody that contested an election and was rejected by the people, claiming to have had first class in finance, could not analyse the steps in taking bond.”
“The bond is supposed for over thirty years, if you take the bond and grow your IGR, by one billion monthly, you can pay it all within a short period of time earlier than thirty-years.”
“We should stop playing destructive politics. We want to be criticised, but constructively and bring alternatives to the table.” “This is the second time in a year that we have to review the budget downward.
The reason for the downward review is apparent to all the economic meltdown we are experiencing, occasioned by the crash in oil prices coupled with COVID-19 pandemic which has affected our state ability to stick with the original budget,” Makinde disclosed.
The penultimate week, the opposition in the state, engaged the governor in the war of words, saying it has uncovered fresh plots by Governor Makinde to add to the debt profile of the state through what it called needless borrowing of N100 billion styled bond by the governor to finance some projects.
The opposition, especially the All Progressives Congress, APC, in the state, noted that: “Oyo State Government’s decision seeking to finance projects in the magnitude of the Ibadan Circular Road by directly seeking for a loan is laughable, misleading and undoubtedly shows signs of no foresight.”
“Interestingly, there was a contractor in place as at 29th of May 2019, when Governor Makinde took over. The Company, ENL Consortium has committed about N7 billion to the Ibadan Circular Road Project.”
“Finally, if the Government of Engr Seyi Makinde eventually cornered the N100 billion loan, his government would have successfully increased Oyo State Debt Profile by adding N139.5 billion within two years.”
“How much debt would the government of Governor Makinde plunge Oyo State to before winding down?” APC queried. Meanwhile, the governor signed into law the revised 2020 Appropriation Bill of N174 billion.
The 2020 Appropriation Bill was reviewed by the state assembly from N213 billion to N174 billion.