Why we are taking loans to develop key infrastructure, reposition Oyo for economic growth-Makinde

Engineer Seyi Makinde, the governor of Oyo State, explained on Wednesday that the decision to obtain loans that specifically target critical infrastructure was a result of his administration’s determination to address the state’s enormous infrastructure deficit and put the state on the path to economic growth.

The way loans are used, he continued, is the problem, not the taking of loans. He noted that given the state’s current economic situation, it would be challenging for the state to overcome its infrastructure crisis and be in a position to attract investments without taking loans intended to develop key infrastructure.

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According to a statement made by the governor’s chief press secretary, Mr. Taiwo Adisa, the governor made these remarks when signing the revised 2020 budget into law, which reduced its spending from N213 billion to N174 billion.

The governor outlined that the revised 2020 budget has N65.2 billion set aside for capital projects and N108.9 billion for recurrent expenses, adding that the state intends to cover a sizable portion of its recurrent expenses with allocations from the federation account and internally generated revenue.

The governor expressed his gratitude to the Oyo State House of Assembly members for reviewing the revised budget proposal promptly and approving the downward review, saying that it was “heartening that the three arms of government have continued to work harmoniously for the good of the people of Oyo State.”

The Deputy Governor, Engr. Rauf Olaniyan, the Speaker of the Oyo State House of Assembly, other key government officials, and several MPs were present for the budget signing event, which took place at the Government House, Agodi, Ibadan.

Governor Makinde said that the state’s economy was harmed by the COVID-19 epidemic, the oil price collapse, and other factors immediately after signing the budget that had been approved.

The governor reaffirmed the administration’s dedication to ensuring that the budget operates at its highest potential, stating that the state would aim for a 70% performance rate in order to guarantee that the 2020 revised budget is appropriately financed.

“This current revision’s motivation is clear to everybody,” he stated. The COVID-19 epidemic and the current economic collapse brought on by the drop in oil prices have had a significant impact on our state’s capacity to stay within the initial budget.

“So, following the review, which we presented to the Oyo State House of Assembly, it was decided to implement an 18.3% downward revision of the budget, from N213 billion to N174 billion.

“I’m signing this updated budget today. It’s appropriate for me to use this opportunity as I sign this updated budget to think about a problem that has long dogged our budget implementation: subpar budget performance.

Since there isn’t enough money to carry out the ideas we provide, they typically remain on paper.

“You will comprehend why our economy continues to expand slowly after you have an annual budget performance of roughly 30%. Otherwise, how would you account for an IGR average of around N1.8 billion over the previous four years?

Insisting that his administration is prepared to make audacious and ambitious efforts to reposition the state economically, Governor Makinde argued that Oyo State’s continued status as a civil service state is due to the fact that it has consistently failed to take the necessary steps to strengthen its economy.

“As a result, we’ve taken certain measures to guarantee that the 2020 amended budget is fully funded. According to Governor Makinde, “We are aiming for a minimum of 70% performance, as I stated when the inaugural budget was signed. The government is taking efforts to guarantee that loans acquired are utilized to support key capital projects.

He declared: “One of the measures we have taken is to make sure that the loans obtained are utilized to finance important capital projects.

Using an alternative project funding approach to complete important priority projects is something else we’re doing. With a spur to Amuloko in Ibadan, this will be utilized for a few more projects in addition to the twenty-one-kilometer Airport – Ajia – New Ife Express Road.

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The contractor would finance the project, and the Oyo State Government would pay for it over a period of thirty months under the alternate arrangement.

Some remarks on the price of the Airport Road have caught my attention. The Airport Road and the Moniya-Iseyin road cannot be compared since there is no foundation for such a comparison. There will be hydraulic structures on the Airport route, unlike the Moniya-Iseyin road.

The governor also took advantage of the opportunity to clarify the air over the proposed Oyo State Prosperity Bond, stating that while the government is aware that floating the bond is a risky move, it is a courageous one that must be made for the development of the state.

“Let me use this occasion to talk about the N100 billion bond, popularly known as the Oyo Prosperity Bond, which was recently submitted and passed by the Oyo State Executive Council. This bond’s flotation is a bold move, there is no disputing it. But I’d like to think that we were elected with the intention of advancing our economy in a bold manner.

We have clear evidence in front of us. The infrastructure needs in our state are enormous. We will continue operating under the status quo if those deficiencies are not addressed. Anybody with a basic understanding of finance will tell you that significant infrastructure investment is the only way to break the cycle of poverty.

“As I have always said, the issue with loans is not the taking of them, but rather the method in which they are used. Without financing intended for the development of essential infrastructure, Oyo State cannot overcome its infrastructure deficit.

We are focusing on, for instance, economically important highways like the Ibadan Circular Road, which is 50 km long, and the Iseyin-Ogbomoso Road. One public hospital is being built or upgraded in each of the state’s three senatorial districts as part of our ongoing commitment to the health sector.

Construction of the Ibadan Dry Port, the rail corridor, and airport improvements are our primary concerns in the transportation sector.

Without proving that we are deserving of these investments, Oyo State would not be able to draw investments into our economy.

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If we keep conducting our economy with the same degree of irresponsibility that the state has come to be renowned for, investors will go to Lagos and even to our neighboring Ogun State.

Tell me, what justification do you have for why Nigeria’s economy didn’t rank in the top 10 in the world? How can we possibly ignore the importance of expanding our economy when we are in such severe circumstances?

“I pledged to use our Roadmap to Accelerated Development of Oyo State 2019-2023 to move Oyo State out of poverty and into wealth. I’m going to do what I said, I swear.

Since we were sworn in on May 29, 2019, every action we have done as a government has been focused on making sure that every commitment we make will be followed through on. As we decide what’s best for the Oyo State population as a whole, I promise to keep walking by you.