The debt debacle in Osun State – Part 2
Continued from yesterday
Different figures had been released by different commissioners, spokespersons and social media commentators as the current government’s own loan repayment figures for their 33 months administration, which I presumed to be from November 2018 to July 2021 because accounting in government is on a cash basis and revenues from federation accounts are earned in arrears. At least, from the published audited accounts of the state for 2020, its annual revenue is 99 billion naira, out of which the internally generated revenue is now19 billion naira. Also, the data management company BudgiT has put its federally collected revenue for 2020 at 52 billion naira. There have been refunds on federal roads and realization of investments and assets created by previous governments.
The different figures on loan repayments prompted me to write emails to the current commissioner of finance, Mr Bola Oyebamiji to check his figure on the loan repayment of 67 billion by Oyetola in 33months (up to July 2021). Previous publication by the sympathizers of the Government put the figure as of March 2021 at 55billion naira and it seems the figure is just racing to probably prove some motives. Twelve billion naira in four months and at an average of 3 billion monthly! Who is piling up a new loan for Oyetola that His Excellency does not seem to know? He said he has not added a single loan (assuming contract finance backed by promissory notes is not being reported to the Federal Government Debt Management Office in Abuja, as required by the law of the federal government) as part of the state’s obligations.
The initial email which I wrote on Saturday, 18th September 2021 was copied to the Governor so that I will not be misquoted and it has been written in good faith and the issue was raised as a family matter. While I was in the office, I had set up the Debt Management Office (DMO) headed by Mr Tunde Adejumo, who was employed by me from the banking industry. According to the law duly passed by the state legislators in 2012, the DMO has aboard, to be headed by the Chief of staff (now the Governor). So the loan portfolio is well known to all. I believe Mr Oyebamiji, who also worked with me in Aregbesola’s first term as the Managing Director of Osun Investment Company Limited (Osicol), will reply to my emails. Meanwhile, I will like to make the following tentative submissions:
1. The monthly loan deduction on the 1st bond (30 billion naira) was 640 million naira and had ceased since July 2019, so Governor Oyetola must have borne the burden for only nine (9) months. I expect total deductions on this to be about 6 billion naira,
2. The loan deduction on the 2nd bond (11.4 billion naira) was 306 million naira and had ceased since March 2020, so Governor Oyetola couldn’t have borne it for more than 17months. I expect the total to be about 5billion naira,
3. Monthly Deduction on external loan, when I was in the office was 100million naira, however, If I use 140 million naira monthly, the total loan deduction for 33 months will be about 4.62 billion naira,
4. The FGN restructured bond for the state’s loan has a monthly loan deduction of 1.14 billion naira monthly. Instead of backing out the local government portion, which is usually recovered through the inter-agencies transfer of LG, I choose to give all the 1.14 billion to the state government and then total deductions would be 37 billion naira
5. Deduction on CBN backed salary bailout the facility is 233million Naira monthly and was deferred since April 2020 and deductions made erroneously by Accountant General of the federation were refunded to Osun General Revenue account to reflect deferrals. Therefore, Governor Oyetola must have borne this for only 17 months, totaling 3.96 billion naira,
6. Deduction on CBN backed infrastructure Facility is 135 million naira monthly and was deferred since April 2020 and deductions made erroneously by Accountant General of the federation were refunded to Osun General Revenue account. Therefore Governor Oyetola must have borne this for only 17 months, totalling 2.30 billion naira,
7. Budget Support Facility given to all the states in 2017 through the CBN to help cushion the impact of dwindling resources and help meet their various obligations. At the expiration of the two-year grace period, the deductions were suspended for one year to enable states to stabilise their finances following the outbreak of the COVID-19 pandemic. The monthly deduction of 153million naira is believed to have been charged from Sept 2019 to March 2020 for 7 months before it was suspended along with others in April 2020. Therefore, the total on this item is 1.07 billion naira
Therefore, the total loan repayment made by Oyetola’s regime in 33 months, from 1 to 7 above is 60 billion naira except there have been an additional debt, which I may not know until I get a reply to my correspondences (the various emails) from the Commissioner of finance of Governor Oyetola.
I know the total loan deduction at the inception of Oyetola administration in November 2019 was 2.4 billion naira monthly and this was consistent for the first six (6) months of his administration. So what could have changed?. With the final payments of tranche 1 and 2 bonds as stated in item 1 and 2 above, the monthly deductions should have come down to 1.4 billion naira monthly and with an increase from FGN budget support repayment, his monthly loan repayment should not have been more than 1.6 billion naira monthly, all things being equal. The repayment burden by the 48th month would still be less than what Aregbesola himself paid in his second term.
Dr. Bolorunduro, a banker, was state commissioner for finance in the immediate past administration of Osun state.