An All Progressives Congress (APC) chieftain in Oyo State and former gubernatorial aspirant, Engineer Oyedele Hakeem Alao (Allow Alao), has raised concerns over Governor Seyi Makinde’s frequent loan requests, warning that the growing debt burden could jeopardize the future of the state.
Alao in a statement by his Media Office expressed his apprehensions in the light of the significant increase in Oyo State’s debt profile under the administration of Governor Makinde.
According to him, since the removal of petroleum subsidy by the present administration of President Bola Tinubu, the money accruing to the states has tripled, stating that there is nothing on ground to justify that Governor Makinde has spent the windfall justifiably needless taking humongous loan.
The Asiwaju of Irokoland disclosed that as at December 31, 2021, Oyo State’s total debt stood at approximately ₦178 billion which include ₦142.56 billion in domestic debt and $85.27 million (about ₦35.46 billion) in foreign obligations, noting that by September 2024, the total debt both domestic and foreign of the state has increased to N181.664B.
“Even when our Governor assumed office in 2019, he claimed to have inherited a ₦150 billion debt from his predecessor. However, official records at the time indicated a lower figure of ₦126 billion. Since then, our state’s debt has grown substantially, raising questions about our Governor’s fiscal management and sustainability”, he said.
Alao also fumed at the high external debt servicing by Makinde-led government, stating “recent data highlights that Oyo State spent ₦20 billion on debt servicing between January and September 2024 alone. This includes ₦13.9 billion for domestic debt and ₦6.5 billion for foreign obligations. Alarmingly, this expenditure surpasses allocations to critical sectors such as healthcare and education during the same period. For instance, no funds were allocated for constructing or providing hospitals and health centres, while spending on public schools was limited to ₦2.6 billion.”
He explained that Oyo State also experienced a sharp rise in external debt servicing costs, increasing by 143.7% from ₦2.61 billion in 2023 to ₦6.36 billion in 2024, adding that as at today Oyo is among the top states with high external debt service costs which according to him reduces economic growth due to the crowding-out effect.
Alao who criticized Makinde’s borrowing strategy, said that the action could mortgage the future of Oyo State by saddling it with unsustainable liabilities, saying “this heavy focus on debt servicing has constrained resources for critical public services and infrastructure development despite pressing needs—79% of households lack access to sanitary facilities, and 57% lack access to clean drinking water.”
He also took a swipe at the state House of Assembly under the leadership of Hon. Adebo Ogundoyin, stating that it has turned itself as a willing tool of Governor Makinde to mortgage the future of the state.
He said, “It is disheartening that the Oyo State House of Assembly, which is constitutionally mandated to scrutinize and provide checks on executive actions, has seemingly become a rubber stamp for Governor Seyi Makinde’s administration. Instead of rigorously evaluating how previous loans were utilized, the Assembly has been quick to approve new loan requests without adequate scrutiny. This trend was evident in their recent approval of another loan request amounting to ₦200 billion, for the governor. Unfortunately, the impact of this approval will significantly increase Oyo State total debt to a staggering N381.664 billion.
“The approval of such a humongous loan without detailed public disclosure or an independent audit of past expenditures undermines the principles of transparency and good governance. The good people of Oyo state are left wondering how these funds will be allocated and whether they will genuinely address pressing developmental needs or merely add to the state’s debt burden. Alao added that, lack of robust legislative oversight will not only weaken democracy but also risks eroding public trust in the government.
“The time has come to call on all critical stakeholders in the state such as the state labour union, civil society organisations, traditional rulers, elder statesmen and women and youth associations to prevail on Governor Makinde to spare the state of unnecessary borrowing as the reality on ground cannot justify the over N380 billion loan that his administration has incurred since he came to office less than six years ago.”
Alao then urged Governor Makinde to prioritize prudent financial practices and explore alternative revenue-generating measures to fund developmental projects without excessive reliance on loans.