TIMOTHY AGBOR
A financial expert, Tunji Ogunyemi, has exposed how the administrations of former Governors Olagunsoye Oyinlola and Rauf Aregbesola plunged Osun State into an unprecedented debt that is capable of crumbling the state should the current administration attempt to offset it.
Ogunyemi argued that the past governments in the state were in a hurry to compete with states like Lagos and Delta and thus got huge loans that were not used to invest but only utilised in paying salaries.
He said Osun was currently in a “sorry” state because it lacked the capacity to embark on capital projects without borrowing and that if the Federal Government defaulted in paying the state its allocation for just two months, “Osun would go down on its knees.”
Speaking in Osogbo on Monday on a radio programme monitored by our correspondent, Ogunyemi, a lecturer at the Obafemi Awolowo University, Ile-Ife, said that contrary to the debt profile of Osun that was put at N134billion for domestic debts, and $107million for external debts, as at December 31, 2020, the state was indebted to the tune of N180billion for domestic debts alone.
The expert argued that the DMO did not add unpaid pension and gratuities of retirees and that if those debts were to be factored in, then the state’s debt profile was N180billion.
He expressed worry that the Internally Generated Revenue of the state was so insignificant and that the state only generated from the salaries it paid to workers.
He blamed the administrations of Oyinlola and Aregbesola for borrowing hugely without investing.
For the expert, the Genesis of Osun’s dilemma was that “Osun came out with the largest chunk, almost 58%, some say 70% of the civil service of the old Oyo State and the state went aborrowing from the beginning. And the debt got exacerbated during the administration of Olagunsoye Oyinlola who, of the N180billion debt profile, actually took a loan in excess of more than N90billion to add to Osun’s liabilities.”
He stated, “During the time of Rauf Aregbesola, another lister of Osun liabilities was opened and that was the Islamic Development Bank loan called Sukuk. It’s true that Sukuk doesn’t carry with it any interest, it carries zero per cent interest rate, which is also a liability and it’s a debt that has to be paid some time in the future.
“So, it has been difficult. But I think that, with due respect to the planners of Osun economy in the last 10 years, it appears as if they were in a hurry; they were in a hurry to catch up with Lagos, with Delta… Lagos for example is about 1,000 times better than Osun in terms of generating revenue. Such a hurry has brought about going for more loans.”
“I have always said that Osun is not a civil service state, it’s an agrarian state. The IGR of Osun State is 96% derived from tax. The tax of Osun State is in the proportion of what it pays out as salaries to workers. It is only a proportion. It may interest you to know that if the state doesn’t pay salaries of workers, it may not also be able to generate IGR. So, a state that is so dependent on itself for its own task and for its physical capacity, what else do you expect? And that capacity is diminishing. So, it’s a very sorry state,” he observed.
“As it is, it means that every citizen in Osun State, as at now, including a child that would be born tomorrow is already owing N38,140, hanging on his neck; that is if we were to divide Osun State’s debt by the total population of the state,” he argued.
