The furore over Oyo prosperity bond

August 26, 2020
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THE fuss about the #100 billion prosperity bond by the opposition party is not only pedestrian but intellectually myopic going by the current economic conditions in the country.  The dearth of infrastructure in Nigeria with particular reference to the Pacesetter State, Oyo State, has been attributed to various factors including but not limited to the lack of political will, corruption, bad maintenance culture and paucity of requisite funds. The paucity of funds arising from  dwindling allocations from the Federal Government, coupled with an emerging internal revenue collection mechanism, has led state governments to depend on alternative financing arrangements to fund their year-on-year budget deficit.  For years, bank loans at high interest rates have played a significant role in funding the said deficit. However, with the re-emergence of the bond market in 2003, the issuance of same by sub-nationals (states) has offered them a viable option in reducing the said deficit and investing in numerous long term capital projects at comparatively lower costs.

Some of the state governments that have taken this route of funding and the size of their respective bond issuance exercises are as follows:  The Lagos State government has announced the launch of its third series of N500 billion bond issuance programme which seeks to raise N100 billion- Business News, January 6, 2020. Ondo State N50 billion, September 9, 2019- Business News, Ogun State N250 billion recently approved. Within the spate of eight years, Osun State has raised N30 billion, while Lagos State has raised N277 billion. On the other hand, Delta State raised  N50 billion from the bond market, while  Edo raised N25 billion. The Kwara State government raised  N17 billion, while its Gombe counterpart raised N20 billion from the market. On its part, Niger State raised N15 billion, while Plateau State raised N28.2 billion. Also, Kaduna State raised N8.5 billion. Others are Benue, N13 billion; Ebonyi, N16.5 billion; Ondo, N27 billion; Ekiti, N25 billion and Bayelsa, N50 billion, among others- Business News

The Oyo State Prosperity Bond of 100 billion is said to be raised in two tranches of 50 billion each for the construction of Iseyin-Ogbomoso road, the Ibadan Circular Ring Road and Ibadan Airport upgrade. The earmarked projects under the said prosperity bond fund would translate to the facelift of the tract of Ibadan Dry Port, revamping of Ibadan Airport business activities, Iseyin/Ogbomoso road, among others IGR prosperities.  Governor Seyi Makindeis magnanimous enough to ensure that the prosperity bond is tied to infrastructural developments to be handled by eminently qualified contractors with utmost transparency.  The current administration would not have had a course for this outsourcing if APC with eight (8) years of uninterrupted governance with excess crude oil fund, bailout fund, humongous federal allocation among revenues had done the needful of long-term economic prosperity.

The accelerated road map of economic development enunciated in the PDP/GSM manifesto borders on education which is being fulfilled and still fulfilling to meet expected standard, agriculture, with agribusiness thriving and farm settlements launched to stimulate internally generated revenue, employment opportunities with a bid to control rural-urban drift; healthcare management with improvement in our general hospitals and other facilities; infrastructure developments are driving force of business investment with the aid of improved security architecture in the state. The succinct cardinal goals of Sir GSM is in tandem with the global Sustainable Development Goals (SDG). This is to admonish the economically inept folks wailing at why GSM seeks to develop the Pacesetter State that it all started here in Oyo State, the headquarters of South-West politics and home of many firsts. Thus, we continue to lag behind in this region and in Nigeria as a country.

  • Aremu writes in via olawaleareoou@gmail.com_

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