The debt profile of a state must be measured against its Gross Domestic Product (GDP) value. GDP is a broad measurement of the state overall economic activity. It is the total value of goods and services produced by an entity in a given period of time, usually annually and quarterly.
In November 27, 2010, Governor Rauf Adesoji Aregbesola government met a strangulating financial situation in Osun as number 34 out of the 36 states in Nigeria in terms of financial muscle on the one hand and a suffocating N18.38 billion loan obtained by immediate previous PDP government which saw Osun borrowing N1 billion monthly in order to fulfil its statutory duties on the other. However, with correct ideas, determination and some financial engineering, Osun limitations have turned around to greatness.
Of the five states declared in 2012 by the National Bureau of Statistics as those with the lowest unemployment rate – Abia 11%, Oyo 9%, Lagos 8%, Kwara 7%, – Osun is the lowest with 3%. What is the magic?
Within 100days in office, Aregbesola engaged 20,000 in Osun Youth Volunteer Scheme (OYES) with N10,000 allowance for the services rendered by each cadet.
Two years after, another 20,000 youths were engaged. The multiplier effect of N200 million directly injected to Osun economy is stupendous. The World Bank has adopted the scheme as a template for youth empowerment in Nigeria.
This has earned Nigeria $300 million grant from the bank as a support for the Federal Government to replicate nationally. The World Bank Sector Leader on Human Development and Task Leader on Youth Employment and Social Support Operation, Professor Foluso Okunmadewa, whose team had visited Osun severally to assess the scheme promised to empower more youths in Osun and called on other states to emulated Osun.
Presently, the Osun government, in collaboration with the World Bank, has empowered 1,131 less-privileged youth as a part of effort by the bank to supporting Aregbesola programme to banish unemployment and poverty.
Under Aregbesola’s watch, Osun is highly risky for criminals and crimes with the procurement of 25 Armoured Personnel Carriers (APC) and 100 patrol vehicles for 24-hour security cover of the state 365 days a year.
United Nations (UN) Multi-Dimentional Poverty Index and The Financial Derivative Company (FDC) Misery Index 2017 concluded that Osun’s, the second best state in Nigeria as far as prosperity (lack of poverty) is concerned.
In several social-economic indexes, Osun is ranked as the second wealthiest state in Nigeria
Based on Debt Management Office release on 31st December, 2016. However, because of the recession occasioned by missing oil money, unchecked oil theft under the PDP government which made Nigeria to be losing 400,000 barrel per day and which resulted to low income to Federation Account and eventual crash of oil price at the international market, virtually, all states found it practically impossible to pay workers salaries, building and maintaining infrastructure and providing social amenities for the people.
By June 2015, 23 states, including Osun, were owing at least 6 months workers salaries. Until he could no longer borrow again, Aregbesola had to borrow up N25 billion to pay workers’ salaries.
It was President Buhari APC that had to bailout the situation via N713 billion, being $2.1 billion (413 billion) from Liquefied Natural Gas procceds shared by the states and Federal Government and Central Bank of Nigeria intervention fund between N250 and N300 billion as soft loans to enable states pay outstanding salaries with Debt Management Office (DMO) helping states to restructure and extend their loans life span. This was what brought Osun internal and external loan to N179 billion to be paid in 20 years. It is the totality of loans and other debt instruments obtained by all administrations that have ruled the state.
Osun has 4 million people. Its debt profile of N179 billion is to be repaid in 20years, per annum, each Osun indigene is obliged to pay N2,237.5 to repay the debt. If this is divided per day, every citizen will pay N6.1 daily for 20 years. This amount cannot buy a sachet of water.
Osun is a rich asset. It cannot be adjudged by its allocation from the Federation Account. It has to be vis-a-vis its productivity, capacity and exchange value amongst others. If I earn N100,000 salary as a University Graduate, that is not my worth. If I were to build a house and maximum loan obtainable for me is N50,000, that can’t be the kind of money required for the project. My worth as a Graduate is between N800 million and N1 billion.
Under Aregbesola, Osun has made dramatic and unprecedented progress from backwater of economic regression to the fertile place of economic abundance.
*Ademola is based at Alekunwodo, Osogbo, Osun State