…declares state has capacity to repay loans
Laide Raheem, Abeokuta
The Ogun State Government has said that the 2024 Budget has been carefully prepared to enhance the infrastructural development of the state in order to attract more foreign investors.
It added that the budget was also to ensure that the state maintains its status as the industrial capital of Nigeria as well as making it the Information and Communication Technology Hub of the country.
The State Commissioner for Finance and the Chief Economic Adviser, Dapo Okubadejo, gave the declaration on Monday during the Media Parley on Year 2024 Budget Breakdown and
Presentation, held at the Olusegun Osoba Press Centre, Oke Mosan, Abeokuta, the Ogun State capital.
He added that though Ogun is regarded as the state with the highest concentration of industries, efforts will be intensified by the incumbent administration to also make the state number one in ICT development by providing an enabling environment and needed infrastructure.
The Commissioner, flanked at the event by his Budget and Economic Development counterpart, Olaolu Olabimtan and the Special Adviser to the Governor on Media, Kayode Akinmade, however, allayed the fear of residents over the debt profile of the state, assuring that the state has the capacity to repay its debt.
According to him, the state has not exceeded its debt limit.
Okubadejo explained that the state has external debt of N55billion, while the internal debt is N82billion.
The commissioner stated that 2024 budget of over N703billion would have a significant and positive effect on the people of the state with a reasonable performance.
He said that the state has been putting its loans into good use, saying almost 80/90 percent of its debts is used for financing capital projects.
“There is external debts of N55bn, internal debts of N82bn, some of these internal loans are also used for working capital requirement, but almost 80 – 90 percent of the debts is for funding capital expenditure that will increase the revenue capacity and the economic base of the state.
“As practical as possible, we look for cheap debts and we all within limit, far below even the limit of all the sustainability ratios of debts.
“If you are afraid to take loan then you are not improving the economic base, if we get cheap debt it is going to be used to fund infrastructure and we have the capacity to pay it.
“People are always very concerned about the debt position in Ogun State, there is no cause for alarm. In fact, we should all go and sleep because, not only are we very careful in the type of debt we take, we are also judiciously utilising the debt for capital infrastructure that will increase our revenue and improve the economic base and we have the capacity to pay back”. Okubadejo stated.
Also speaking on how the 2024 budget will be financed, he disclosed that the budget will be funded with Internally Generated Revenue (IGR)destinated at N240billion.
The Commissioner emphasized that IGR remained a critical part that the state would use to fund critical development.
Okubadejo stressed that the state was one of the state in the country that depended less on federal allocation, saying that there was need for the state to be economically and financially independent.
“We are projecting N240billion from our internally generated revenue this year. We are one of the states that is less dependent on federal allocation.
“We have to be economically and financially independent as a state. The execution of the 2024 budget is critical to us.
“Our revenue in the state is increasing while our debt profile is decreasing. The debt is used to fund capital expenditure that will improve development of the state,” he said.
He noted that the state remained one of the fastest growing economy in the country, saying that the economy needs to be more robust in order for the state to achieve its goals.