Osun debt profile and APC’s bursted lies By Sarafa Ibrahim

Osun debt profile and APC’s bursted lies

By Sarafa Ibrahim

Yoruba elders are philosophical, often reading into the future through wise sayings and expressions. One of such expression is “iro ma un tan ina ni, ki leso,” literally meaning that lies can only have light but will never bear fruit.

This was the feeling I had moments after reading a document from the Debt Management Office (DMO) that analyzed the debt profile of each of the 36 states in Nigeria and the Federal Capital Territory (FCT). My interest in the DMO document stems from the well-crafted lies by elements in the Osun State chapter of the All Progressives Congress (APC) to sell the impression that Governor Ademola Adeleke has added N10 billion to the state’s debt binge in the 2023 fiscal year.

Although, the author of the untruth, one Adebayo Adedeji, showed a lack of understanding of accounting and budgeting documents, his wrong conclusion was taken for a fact by his likes in the APC and spread out to misinform the public. But as fast as his lies and that of his party, the APC could run, the truth, which the DMO document represents, has caught up with it.

According to the DMO document, the domestic debt of Osun as of December 31, 2022, only a few days after Governor Adeleke assumed office, was N148bn. A year after, precisely December 31, 2023, the debt value has shed about N4bn, as it stood at N144bn. For the foreign debt, the DMO document showed that Osun was indebted to the tune of $91.77m as of December 31, 2022, and by December 31, 2023, the debt had drawn down to $87.24m, representing a reduction of over $7m in the state’s external debt.

The clear indication from the above data is that contrary to the false impression that Adedeji and his party tried to sell, Governor Adeleke did not add any kobo to the inherited debt binge. What the numbers clearly tell us is that Osun debt profile has seen a reduction under Governor Adeleke and the insinuation that the governor borrowed N10bn in 2023 is nothing but a fallacy and pure fabrication.

The DMO document has further established that Governor Adeleke is a man of his word, which I am sure will unsettle the Osun APC. It is not in doubt that the Osun APC is not proud of its past and the damages wrought on Osun through reckless financial management and wants the public to believe that Governor Adeleke is doing the same, even if it has to concoct lies.

Beyond this, we have come to learn, through the DMO document and StatiSense data, that the consistent claims that former governor Gboyega Oyetola reduced the Osun debt binge may not be correct. According to StatiSense data, which quoted the DMO as its source, the debt profile of Osun state when Oyetola assumed office in 2018 was N148.1bn and by the time he left office, the DMO quoted the figure of the domestic debt of the state at N148.4bn.

What the above clearly indicated was that the debt profile of the state left by Oyetola was as it was when he came to office. The only explanation for this scenario will be that the Oyetola administration concentrated most of the much-touted N91 billion in servicing debt on other commitments, such as the one necessitated by the APFA model.

The APFA (Alternative Project Funding Approach), which was heavily relied on by the Oyetola administration for the execution of projects, is a form of borrowing. Why this fact seems elusive to many is the smart way it was crafted to seem a better deal for the state. But that is not the case. While the State Government will not directly secure credit for the projects to be executed, the contractor will do so and transfer not just the cost of the interest of the credit on the state but additional costs too.

And payment will be spread within the life of the administration that explored it, which is deducted at source on allocations that accrue to the state. In a January 2022 piece, I opined that “On the surface, the AFPA model is a good deal, but the simple truth is that it comes at a more extra cost to the state. Aside the possibility of project coming at an inflated cost, the contractor will no doubt transfer the cost of servicing any credit facility obtained to execute the project on the state. In essence, the state will be paying more than it should ordinarily pay on a project.”

  • Sarafa Ibrahim is a Special Assistant to the Osun State Governor. He writes from Iwo, Osun State.

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