You are liars it is not 300 billion, we only owe 40 billion | Amosun clarifies things, but is he right?

by Olorunwa Lawal

Ogun state governor, Ibikunle Amosun, has put the state’s debt profile at between N35 billion and N40 billion, far from the N300 billion claimed in some quarters.

Speaking on the topic: My Stewardship, during a live programme of the state – owned Television station – OGTV, Amosun claimed that his administration has had to pass through a “strenuous and difficult approach” to source funds from banks to enable it execute its many capital projects among others across the state in the last three years.

He said, “The Opposition said we have borrowed over N300 billion in debt to finance our projects,. They are just liars, no bank in Nigeria can lend any government more than N25 billion. What they don’t know is we have increased our IGR to more than N5 billion monthly from initial N730 million we met.”

According to him, the highest credit facility ever collected at a time by the administration “is about N15 billion while it is so managed in such a way that the debt profile does not exceed N40 billion.”

Throwing a barb at former governor, Gbenga Daniel, Amosun said his government inherited “crippling debt burden from his predecessor which was being settled in bits but that in civilized climes, such people that plunged Ogun State into needless liability, should be walking on the streets in palpable remorse, and perhaps made to face justice.

The Governor also assured that he would do everything within his power to resolve the rift between him and former governor, Olusegun Osoba, whom he said remains his leader any day.

He said he recognised the fact that no politician would want to go into general elections with a divided house as an atmosphere of division and acrimony rarely profit anybody.

Does Ogun really owe just N40 billion

According to recent figures released by the debt management office, Ogun State is currently carrying a debt profile of N45.725 billion, with only Lagos carrying a larger debt profile in the south west of the country.

Also, based on figures from the CBN, Ogun’s yearly receivables (government allocations and internally generated revenue) stand within the region of N73.57 billion.

Of these, expenses (mostly recurrent) produce a deficit on its income. This may actually be the reason banks are reluctant to lend beyond certain limits, seeing that the earning power of the state vis a vis it’s expenditure, is currently not as strong as it should be.

Comments (3)

  1. I have not gone to Ogun state to see what the government of Amosun has done,but the debt profile of N40bn for a state with annual income(fed allocation and IGR) of less than N80bn is suicidal. How long will it take the state to fully repay and live on their income.Even the banks that lent to the state should be sanctioned by CBN.

  2. Once government reached higher-debt status, they tended to suffer lower subsequent growth.
    high government debt has a negative effect on long-term economic growth. When government debt grows, private investment shrinks, lowering future growth and future wages.
    And many debt-overhang episodes featured slow growth despite low interest rates on government debt.High government debt can seriously slow economic growth. Slow growth is in important respects worse than a recession it lowers incomes and well-being permanently, not just temporarily.Painful that high government debt hurts growth even in the absence of a crisis.
    If I may ask, what positive effects has the huge debt have on the impoverished people?

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