As the people of Osun State warm up for 2018 electioneering campaigns for governorship election, cheap propaganda about Osun debt thrives and make waves in the print, electronic and social media.
The Osun debt issue is more political than economic because of the eventual revelation that the state’s debt portfolio falls far short of what the opposition had told the media.
The opposition told us and still tell us that Governor Aregbesola borrowed more than N300 billion naira but the Nigeria Extractive Industries Transparency Initiative (NEITI), revealed that the debt burden of the 36 states of the Federation rose to over N3.342 trillion, as at 2016. NEITI’s spokesman, Dr. Orji Ogbonnaya Orji said Lagos, Delta, Osun and Akwa Ibom topped the debt chart with a debt profile of N1.262 trillion, representing about 38 per cent of debts owed by the 36 states. The breakdown shows that Lagos was indebted to the tune of N603.25 billion, Delta owes N331.95 billion, Osun and Akwa Ibom are indebted to the tune of N165.91 billion and N161.23 billion respectively, as at 2016. This information, according to Orji, was contained in the third edition of NEITI Quarterly Review, a research publication which focused on Federal Accounts Allocation Committee (FAAC) disbursements in 2016.
Also, this (NEITI) Review shows debt profile and a drastic drop in the revenue profile of most states of the federation. NEITI did not accuse Governor Aregbesola of borrowing N165 billion from 2010 to date and it has not accused Aregbesola of borrowing beyond the capacity of Osun Internally Generated Revenue. What NEITI did was to review Osun State debt holistically from 1991-2016. I want to correct an erroneous impression about Osun Debt which critics have accused Governor Aregbesola of borrowing beyond the capacity of Osun Internally Generated Revenue. Osun State was part of old Oyo State that took loans from Paris and London Club of creditors, Osun State paid part of the interest for the loans. This is the rationale behind the benefits Osun State is getting from Paris Club refund. Critics should know that Aregbesola did not go to Paris Club to borrow money. It is wrong to accuse Governor Aregbesola of borrowing N165 billion because a larger percentage of the debt was inherited.
Those who criticize Aregbesola on debt are playing politics of 2018 election in Osun State. The people of Osun State are overwhelmed and satisfied with the performance and developmental strides of Governor Aregbesola. The people have rejected the politicalization of Osun State debt that started from the creation of Osun State in 1991. The people have realized that Osun debt has now become a tool for cheap propaganda in the hands of critics in Osun State as we approach 2018 governorship election because Osun State is benefitting from Paris Club refund even when the state was not created when Nigeria took loan from Paris and London Club of creditors.
Osun’s debt is justified and proportional to the rapid infrastructure and economic development which has proved an undeniable answer to those playing politics with the state’s debt profile. After more than six years of historic growth, Governor Aregbesola has been working by achieving high growth as part of a broader effort to shift from consumer-driven economy to a manufacturing-based economy. This has prompted concerns from critics who think that the acceleration is too sharp. Osun’s economic growth for the past six years is the highest since 1991.
There’s also positive evidence that Osun Debt under Aregbesola is economically relevant. In the face of dwindling state resources, Governor Aregbesola has taken upon himself some ambitious, near impossible tasks and turned them around. Osun roads: Osogbo East by-pass project, AbdulKareem Adebisi Akande Trumpet Interchange Bridge linking the Ibadan-Ife Expressway with the new Omoluabi Motorway (old Gbongan-Osogbo Road) and others are obvious examples. There is also credible evidence that the state is a viable centre for global investment hub and other projects. In Osun State, the Model for road development is comprehensive and it encompasses the full complement of the road infrastructure including walkways, side drains, pavements, green areas, green median for the dualized roads and street lights. These are innovations that have dramatically changed the landscape of Osogbo the State Capital and other major towns in the State.
It is wrong to accuse Governor Aregbesola of borrowing beyond the capacity of Osun Internally Generated Revenue because the Governor has raised the Internally Generated Revenue from 200 million naira monthly to 1.6 billion naira monthly in the past six years.
Also, Osun debt is within threshold, it means among nations of the world, Osun set targets or limits for itself. That limit is usually domesticated against the gross domestic product. The volume of Osun domestic debt has not exceed 40 percent of its GDP. Having noted that figure; the Debt Management Office (DMO) in Nigeria has set a limit for Nigeria (self-imposed limit) of 25 percent, despite the fact that the acceptable limit is 40 percent. Nigeria sets a lower bar. DMO wants to pull Nigeria back if we hit 25 percent of our GDP. Nigeria has just hit 20 percent. So, in terms of ratio, Osun is doing very well.
Under Governor Aregbesola, there is growth in Osun economy and there are corresponding receipts: the economy is active; commerce, industry, employment and tax revenue have increased in Osun. There are several ratios that lend Osun to remain within threshold of borrowing and that has to do with Osun tax revenue to GDP ratio. The tax has increased as businesses are doing well; more people are gainfully employed, and they pay taxes. The companies are doing well, they pay taxes so the Internally Generated Revenue which has increased from N200 million monthly before Aregbesola came to power to N1.6 billion naira monthly as at 2017.
It is true that past and present chief executive public officers of local, state and federal governments in Nigeria have been running on deficit budgets which have led to huge debts. As far as the debt of Osun State is concerned, the fact is that Osun has always had debt since 1991. Her population is growing and for a long time since 1991she has run deficit budgets to cater to the needs of that growing population.
Governor Aregbesola has not borrowed beyond the capacity of Osun’s internally generated revenue and he has met existing debt Obligations from Osun allocations, for repayment of the debt. Governor Aregbesola met monthly recurrent expenditure of N6.59 billion naira and monthly generated revenue including federation account of N2.95 billion naira. He met a revenue deficit of more than N4 billion naira. Critics should educate Nigerians on monthly revenue deficit of N4 billion naira in Osun State. On assumption of office Aregbesola made several attempts in determining the true position of Osun State’s Debt Obligations. Osun has on record the result of the various attempts at reconciliation starting with the reconciliation of obligations to Paris Club Debt in January 1992, Reconciliation of Loan – on-Lent and Rescheduled Loans in February 1995 and other efforts in 2001, 2005 and 2007.
The increasing public debt profile of the Nigerian government is attributable to borrowing to finance emergencies such as natural disasters and economic depression, to finance important capital projects, such as water dams, agricultural development projects, road development projects to finance current expenditure in anticipation of reasonable revenue collection.
Governor Aregbesola of Osun State appears very cautious and extremely careful in its spending; and he seems highly reluctant to accumulate more debts, but with the reckless and frivolous spending of the past administrations, the lack of necessary savings and dwindling oil revenue, borrowing remains inevitable for the time being. There is the exigency of paying salaries, the categorical imperative of bridging diverse infrastructural gaps and need to embark upon germane development for nation building, and servicing debts obligations. However, in all of these, one thing appears quite clear: Under the present administration of Governor Aregbesola, funds are well managed and not stolen by public officials.
The concrete results of Osun’s loan can be seen all over the state. The money borrowed cannot be compared to the development projects executed and the expected multiplier effects of the legacy projects. The Osun’s 165 billion naira loan portfolio is spread widely, but more than 60% of its loan is to projects in health and education, hotels and tourism, construction and building, electricity and water, and agriculture, all of which are central to the current and future prosperity of the state and its people.
Agriculture is a key sector in Osun and one of its most important crops for hefty export earnings is cocoa. The health sector also has a growing demand in Osun. Energy is also essential for development, but Osun State, like Nigeria, suffers from a yawning gap in its power needs.
Osun 165 billion naira debt should be measured in line with the achievements of the governor which includes: 40,000 Youths Employed under the Osun Youth Empowerment Scheme; 5,000 Youths trained and empowered in information communication technology under the Osun Youth Empowerment Technology (OYESTECH), over N2.4 billion injected to the economy as allowances for the OYES Volunteers, 123 kilometres of waterways (streams, arteries, canals) dredged to keep the state flood-free, 750,000 school students provided with school uniform coupled with empowerment of 3,000 tailors, 150,000 students provided with computer tablets (opon imo), an electronic learning tool preloaded with 17 subjects, 54 textbooks, and past questions of JAMB, WAEC AND NECO of the past 10 years, introduction of bi-monthly environmental sanitation exercise under the O’CLEAN Initiative to keep the state clean.
There is the beautification of the 185 km Oyo Boundary (Asejire) to Osun-Ondo Boundary (Owena), trucks provided for a Public-Private Partnership waste management model in the state, Primary School Funding Grants increased from N7.4 million to N424 million a year, 240,000 children feed daily with nutritious meals under the Osun Elementary School Feeding and Health Programme coupled with empowerment of over 3,000 caterers.
Also, Secondary School basic funding grants from N171 million to N427 million per year, Tuition Fees in State-owned Tertiary Institutions reduced by 30%, security of lives and properties being guaranteed with provision of 25 Armoured Personnel Carrier, over 100 security patrol vehicles and one helicopter for surveillance, 2 state of the art police stations built, Internally Generated Revenue(IGR) increased from N300 million to N700 million without increasing tax payable by citizens, setting up of Omoluabi Conservation Fund with a N4.2 Billion reserve, Osun Debt Management Office established.
Others are building of the largest commercial apiary in Sub-Saharan Africa for refined honey production, over 1,765 hectares of land cleared and prepared to support farmers, Rehabilitation of farm settlements in the state Over N1 billion committed to support farmers, Building of super highways to connect Osun to Lagos and Osun to Kwara States, 81 township roads covering 128km have been upgraded all over the state.
Again, there is the Ede Water Works capacity increased from 13% to 100% capacity, over 3,000 permanent teachers employed into the state education sector, 300 km roads have been built across the 30 Local Government Areas and Ife East Area Office, Modakeke, Osun Ambulance Service Authority Established with 400 youths trained as paramedics, 9 State Hospitals and 12 comprehensive health centers have been rehabilitated in the state; 74 Primary Health Centers built, Osogbo Railway Station undergoing massive rehabilitation.
Osun economy under Governor Aregbesola is supported by its strong growth prospects, prudent fiscal management and large and stable investment inflows, I expect public sector investment in Osun State to continue to drive economic expansion in the near-term, with growth averaging around 10% in real terms over the next two years.
By contrast to those who left Osun state in ruins, Aregbesola is the first Governor to have launched a RESCUE AGENDA for a state that was moribund when he came to the helm of affairs more than six years ago. There is hardly any family in Osun State today that has not been directly affected by the Aregbesola administration’s projects, RESCUE AGENDA such as O’YES, O’REAP, O’CLEAN, O’SCHOOL and attempts to turn the state into the economic hub of the Southwest. Governor Aregbesola has introduced in developing Nigerian educational system:the concepts of OSUN SUKUK FUND FOR EDUCATION AND OSUN SCHOOL FEEDING PROGRAMME that every Nigerian must study and cherish. The Osun State HGSFHP, now known as Osun Elementary School Feeding and Health Programme (O-MEALS), commenced as apilot programme of the Home Grown School Feeding and Health Programme (HGSFHP) introduced through the Universal Basic Education (UBE) 2004 Act.
Inwalomhe Donald writes from Benin City