Ogun allays fears over growing debt profile

The Ogun State Government has allayed the fear of residents over the rising debt profile of the state, saying the state has the capacity to repay its debt.

The Commissioner for Finance, Dapo Okubadejo, who gave the assurance during the 2024 budget breakdown and presentation, said there was no cause for alarm over the state’s debt profile, adding that the state had not exceeded its debt limit.

Daily Trust reports that there have been concerns over the debt profile of the state which the Debt Management Office (DMO) puts at N270bn.

But reacting to the concern, Okubadejo explained that the state had an external debt of N55bn, while the internal debt was N82bn.

The commissioner stated that the 2024 budget of over N703bn would have a significant and positive effect on the people of the state with a reasonable performance.

Okubadejo, who is also the Chief Economic Adviser to Governor Dapo Abiodun, said the state had been putting its loans into good use, and that almost 80 to 90 per cent of its debts was used for financing capital projects.

Okubadejo, who was flanked by the Commissioner for Budget and Planning, Olaolu Olabimtan, further said an economically viable state such as Ogun had no reason not to repay its debts.

He noted that, “If you are afraid to take loans, then you are not improving the economic base. If we get cheap debt, it is going to be used to fund infrastructure, and we have the capacity to pay it.

“People are always very concerned about the debt position in Ogun State; there is no cause for alarm. In fact, we should all go and sleep because not only are we very careful in the type of debts we take, we are also judiciously utilising the debts for capital infrastructure that will increase our revenue and improve the economic base, and we have the capacity to pay back.”

Also speaking on how the 2024 budget will be financed, Okubadejo said the budget would be funded with Internally Generated Revenue (IGR) estimated at N240bn.

Okubadejo stressed that the Ogun was one of the states in the country that relied less on federal allocation, saying that there was a need for the state to be economically and financially independent.