Osun Debt And Revenue Profile In Perspectives

Osun, under Governor Rauf Aregbesola watch, is seeing by ADEMOLA YAHAYA to have made dramatic and unprecedented progress from backwater of economic regression to the fertile place of economic abundance. The debt profile of a state must be measured against its Gross Domestic Product (GDP) value. GDP is a broad measurement of the state overall…”
Moroti Olatujoye
May 4, 2018 10:21 am

Osun, under Governor Rauf Aregbesola watch, is seeing by ADEMOLA YAHAYA to have made dramatic and unprecedented progress from backwater of economic regression to the fertile place of economic abundance.

The debt profile of a state must be measured against its Gross Domestic Product (GDP) value. GDP is a broad measurement of the state overall economic activity. It is the total value of goods and services produced by an entity in a given period of time, usually annually and quarterly.

In November 27, 2010, Governor Rauf Aregbesola’s Government met a strangulating financial situation in Osun as it occupies the 34th position of 36 states in Nigeria in terms of financial muscle on the one hand and a suffocating N18.38 billion loan obtained by the immediate past PDP government on White Elephant Projects where the state had to be borrowing N1 billion monthly in order to fulfill its statutory obligations. However, with ideas, determination and some financial reengineering, Osun limitations have turned around to greatness.

Of the five states declared in 2012 by the National Bureau of Statistics with the lowest unemployment rate – Abia 11%, Oyo 9%, Lagos 8%, Kwara 7%, Osun is the lowest with 3%. What is the magic?

Within 100 days in office, Aregbesola engaged 20,000 youths in one single swoop into Osun Youth Empowerment Scheme (OYES) with N10,000 allowance for the services rendered by each cadet. Two years after, another 20,000 youths were engaged. The multiplier effects of N200 million directly injected to Osun economy monthly is very stupendous. The World Bank has adopted the scheme as a template for youth empowerment in Nigeria. This has earned Nigeria $300 million grant from the bank as a support for the Federal Government to replicate nationally.  The World Bank Sector Leader on Human Development and Youth Employment and Social Support Operation, Professor Foluso Okunmadewa, whose team had visited Osun severally to assess the scheme promised to empower more youths in Osun and called on other states to emulate Osun.

Presently, Osun Government, in collaboration with the World Bank, has empowered 1,131 less-privileged youths as part of efforts by the bank to supporting Aregbesola’s programme to banish unemployment and poverty.

Over 253,000 Elementary School Pupils are fed nutritional meals – chicken, fish, beef, eggs and fruits at every school day. Apart from serving as a tactical weapon against illiteracy and bait for greater enrolment of pupils which gives hopes in life to these kids, N1.5 billion spent on the meals is an incentive to farmers to produce more, as there is a guaranteed market for their produce. The scheme has also empowered 3,007 caterers. N800 million was committed to 750,000 School Uniform for the Elementary, Middle and High School Students, which has created 3,000 jobs for Osun people at the Omoluabi Garment Factory.

Massive road networks construction and maintenance in the cities and rural areas are unprecedented in the history of the state. A 43km highway connecting Osogbo to Kwara State; Osogbo East Bypass that connects Iwo Road, and Osogbo City Stadium to Osogbo Gbogan Road and Adebisi Akande Trumpet Interchange Bridge on Ife-Ibadan expressway among others are being completed. Workers Drive has been commissioned. Over 100km roads have been built in rural areas  and 130km access roads upgraded in some rural areas especially around production cluster areas. Apart from Lagos, Osun is a permanent construction site.

Building of State-of-art Model Schools across the State with all modern facilities that will make teaching and learning more conducive; renovation and upgrading of Tertiary Health Facilities with modern medical equipment; construction of various Primary Health Centres across the Local Government Areas with medical equipments; solar and new motorised powered boreholes are also there. The procurement of 49 highly mobile ambulances for a swift response to emergency which has saved 12,171 lives, including 8 pregnant accident victims rescued and gave birth inside the Ambulance while being conveyed to the hospitals are all good story to tell.

Under Governor Aregbesola’s watch, Osun is highly risky for criminals and crimes with procurement of 25 Armoured Personnel Carries (APC) with 100 Patrol Vehicle for 24-hour security cover of the state 365 days a year.

United Nations (UN) Multi-Dimensional Poverty Index and The Financial Derivative Company (FDC) Misery Index 2017 concluded that Osun, under Aregbesola’s administration is the Second best State in Nigeria as far as prosperity (lack of poverty) is concerned.  They affirmed, “The totality of borrowing that Osun witnessed under the Aregbesola Administration has been heavily invested in infrastructure, education, social services, human capacity development and has consequently translated into an economy with underemployment, unemployment and inflation well below national average and diverse”. In several social-economic indexes, Osun is ranked as second wealthiest States in Nigeria.

Based on Debt Management Office release on 31st December, 2016 on States and Federal Governments External Debt Stock, Osun External Debt is N70,533,845.79. However, because of the recession occasioned by missing oil money, unchecked oil theft under the PDP Government which made Nigeria to be losing 400,000 barrel per day and resulted to low income to Federation Account as well as eventual crash of oil price at the international market, virtually all states of the federation found it practically impossible to pay workers salaries, building and maintaining infrastructure and providing social amenities for the people. At a stage, the Federal Government had to be obtaining loan to pay Federal Civil Servants. This was in 2014 under President Jonathan’s PDP Government. By June 2015, 23 states, including Osun, were owing, at least, 6 months workers’ salaries. Until he could no longer borrow again, Aregbesola had to borrow to pay workers’ salaries.

It was President Buhari APC that had to bailout the situation via N713 billion, being $2.1 billion (413 billion) from Liquified Natural Gas proceeds shared by the states and Federal Government, and Central Bank of Nigeria intervention fund between N250 and N300 billion as soft loans to enable states pay outstanding salaries with Debt Management Office (DMO) helping them to restructure and extend their loans life span. This was what brought Osun internal and external loan to N179 billion to be paid in 20 years. This is the totality of loans and other debt instruments obtained by all administrations that have ruled the state.

Osun is populated by 4 million people. Its debt profile of N179 billion is to be repaid in 20 years, per annum, each Osun indigene is obliged to pay N2,237.5 to repay the debt. If this is divided per day, every Osun citizen will pay N6.1 (Six Naira, one kobo) daily for 20 years. This amount cannot buy a sachet of water popularly called Pure Water.

Osun is a rich asset. It cannot be adjudged by its allocation from the Federation Account. It has to be vis-a-vis its productivity, capacity and exchange value amongst others. If I earn N100,000 salary as a University Graduate, that is not my worth. If I were to build a house and maximum loan obtainable for me is N50,000, that can’t be the kind of money required for the project. My worth as a Graduate is between N800 million and N1 billion.

Under Governor Aregbesola watch, Osun has made dramatic and unprecedented progress from backwater of economic regression to the fertile place of economic abundance.

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