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Osun explains sustaining development amid recession

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Recently, Governor Rauf Aregbesola explained some of his administration’s achievements and challenges to jounalists. DORCAS OMOLADE ORE was there.

At a period when most narratives point to ‘The Recession’ as an excuse for the crippling growth/performance some states are managing to stay afloat. One of such state is Osun.

According to Gov. Rauf Aregbesola, while it may be easy to heap the blame of this economic downturn on the present leadership in the country, the national treasury was plundered by cronies, friends and lackeys of government and the ruling party functionaries..

While on the topic of mismanaged economies, it goes without saying that critical infrastructure in Osun before the inauguration of the government of Ogbeni Rauf Aregbesola in November 27, 2010, was largely in a comatose. Economic activities had largely slowed down with considerable capital flight and migration of citizens in search of a better life.

Notwithstanding, Aregbesola said two options were available to him when he on board; one was to continue in the traditional cosmetic governance: repaint a few state-owned buildings, patch a few roads here and there, pay salaries of civil-servants, using over 70 per cent of the state’s revenue (civil-servants represent less than one per cent of the 4.2 million Osun resident); position Osun towards the path of sustainable economic development by making a case for concerted investments and using creative means to raise fund for critical physical and human infrastructure that will in turn spur private investments and economic growth.

Explaining, the governor said for such a small state in a country with high inflationary environment, high cement prices, currency exchange risks and non-existent steel industry (major components of construction), developing Osun into a 21st Century state became a major challenge.

To wait for the time when the cost of building a school or of constructing a road to double would have been unforgiveable, not now that a dollar exchanges for N450, compared to then at N150.

“Osun opted for a mix of financing options to reduce risks and meet its primary statutory commitment. She followed a responsible borrowing regime by only committing 30 per cent of its revenues to debt servicing, leaving free cash-flow for critical and mandatory expenditure, such as salaries. With this, Osun began an aggressive infrastructure roll out in 2012 before the three-headed tragedy of: Blanket salary increment negotiated by the Federal Government of behalf of states in 2012; 40 per cent crash in statutory allocation due to alleged theft of 400,000 barrel of oil per day in 2013; and 50 per cent crash in the global price of crude oil and subsequent impact on statutory allocation. But for these, the State of Osun would have been just fine.

“As we speak, three super highways are under construction. These super highways consist of five bridges with each bridge at 90 per cent completion. Despite this biting recession, construction is ongoing because Osun secured an innovative promissory note purchase facility.

“Osun’s financial model worked perfectly by creating a pool of funds for infrastructure roll out that can only be utilized strictly for such purpose; due to market regulations of such funding by 2014. Using this financial mix, the administration of Ogbeni Rauf Aregebsola rehabilitated and completed 230 states roads spanning 368km. His administration partnered local governments to deliver 226 council roads across the 30 local governments and the development area with a combined length of 216km. “

Osun, he explained, in partnership with the World Bank, RAMP 2 programme, also delivered 250 km of rural roads to open up farms in rural areas. The state is one of just six states selected to partake in this programme. In all, the government has so far delivered road infrastructure to the tune of more than 1000 km, opening up our rural enterprises and areas, connecting urban centres and positioning the state as a trade and production hub.

Other construction projects, as explained by the governor, include, 20 elementary schools and 22 middle schools all completed and in use. Many more are still under construction.

Despite its limited resources, the State of Osun, he said has continued to champion delivery of an integral human development agenda. Osun in the last six years has made unprecedented investments in security towards the greater welfare of the people. Twenty five high capacity Armoured Personnel Carriers were deployed, being the largest contribution to the Nigerian Police by a state government at the time of deployment. The state today enjoys a functional 24-hour emergency ambulance services with a fleet of 50 brand new vehicles across the 31 local government areas. This state-wide ambulance service is powered by 408 well-trained and kitted paramedics, who have attended to more than 8,000 cases since inception. This quality of service in concept and implementation is unprecedented in the annals of the state.

The governor said Osun has also invested concisely in the empowerment of micro, small and medium enterprises (MSME), given the trickle-up impact these make to socio-economic development. So far, it has deployed over N7 billion to 50,000 beneficiaries spread across 4,500 cooperatives and/or businesses targeted at market women, small scale farmers, artisans and physically-challenged individuals. Through its welfare programme for critically poor citizens, the government has supported 16,250 widows and disadvantaged persons.

Through the State’s partnership with the World Bank, The Osun Agency for Community and Social Development Project (OSUN CSDP), it was revealed, has reached 1,073,129 beneficiaries in rural communities by committing at least N2 billion to several social developmental projects. The partnership is delivering 356 inclusive, gender sensitive and multi-sectoral micro projects, covering Education, Rural Electrification, Primary Health Care, Transportation, Potable Water provision in 263 communities across the state.

At the basic education level, the governor said the state has delivered training and re-training for over 21,017 teachers, giving the importance of these to the learning experience. So far, 277 model schools with 1,811 modern classrooms have been built or rehabilitated. The schools are being furnished with 26,922 sets of chair and table. Every school day in Osun, 253,000 elementary school children receive nutritious meals produced largely by local farmers, to boost health and cognitive capability at their formative stage, as well as boost local food production. The Osun School feeding programme is the longest running of its kind in the country.

In six years, Osun has through its basic education agency, invested over N8.5 billion to build capacity, both in human and physical infrastructure. This investment in education is driven by the resolve of the administration to equip the future generation of Osun with the best possible resources regardless of their background, so they can seek a better and prosperous future for themselves and consequently for the State.

As many states became fiscally unstable and shortfall in federally collected revenues continued to challenge salaries payment, the government of President Muhammadu Buhari heeded Osun’s push for interventions by helping her and other states restructure commercial loans into FGN bond with reduced financial cost and freeing of cash-flow in August 2015. The FG also granted a concessionary loan to Osun and many other states to clear backlogs of salaries and to restore treasury and fiscal stability of these states.

On salaries, the governor said from August 2015 till now, the prudent management of concessionary loan (bailout) and its subsequent revenues has ensured salaries are paid and workers keep their jobs, rather than embark on mass retrenchment; an alternate idea other state governments have toyed with.

The salary regime, the governor explained ensures full salaries are paid to junior cadre in levels 1-7, while their senior counterparts are paid nothing less than 50 per cent or greater, depending on the level of income per month.

The governor explained that the developmental programmes have also impacted on the socio-economic profile of the state as reported by reputable institutions. In 2015, The Oxford Poverty and Human Development Initiative (OPHI) rated Osun 2nd Highest in Human Development Index among the 36 states in the Country. In 2014, Renaissance Capital (RENCAP) in its 36 shades of Nigeria economic review of states ranked Osun as the 7th largest economy in Nigeria, while in 2013 the NBS rated Osun as the state with the lowest poverty rate in Nigeria.


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Osun StateRauf Aregbesola

1 Comment
  • DObservation

    Kudos to Aregbesola on how his expert management of scarce resources has seen the state meet salary demands while still making sure that capital projects committed to go on unhindered. That is expert managaement, coming in an age where most governors have stopped working projects. Aregbesola has been one of the few governors to keep commissioning projects even in this recession and that shows wisdom on his part. You can pay salaries with what you get but salaries do not secure the future of your state. Investments do, and Ogbeni understands this.