Ogun State Government says it is expanding infrastructure in the state to boost economic growth and enhance the prosperity of its citizens and residents.
The Chief Ecomomic Adviser/Commissioner for Finance, Dapo Okubadejo, made this disclosure during a media forum on the breakdown of the state’s 2023 budget.
The commissioner said the state government had given priority to infrastructure growth in the 2023 budget to guarantee robust road network, improved power and other amenities that would accelerate growth and prosperity of the state.
He said the state had focused on completing key projects like Epe-Ijebu road, Atan-Agbara-Lusada road, among others, while also bracing to commission the Ogun Agro-Cargo Airport among others this year to ensure the administration’s vision was achieved.
He said the state government was also targeting two local government areas in the state for oil exploration.
Okubadejo said both Tongeji Island in the Ipokia Local Government Area and a new oil spot in Ogun waterside had been marked for exploration.
While speaking on the plan by the government to fund this year budget of N472bn, the commissioner said the state was targeting N210bn from the Internally Generated Revenue, N128bn from capital receipt and Federal Account Allocation Committee revenue.
He said “Our IGR , federal allocation which is becoming unreliable and our capital receipt would be used to fund the budget . We are going to make use of our oil in Tongeji Island and Ogunwaterside.”
Speaking on the misconceptions surrounding the debt profile of the state, Okubadejo said the Dapo Abiodun-led administration inherited N142bn debt from the previous administration of Senator Ibikunle Amosun.
The commissioner said it was wrong to compare the debt profile of the state to any other state without putting into consideration the economic viability and the capacity of the states.
According to him, obtaining a loan is not a problem if the loan is being put to good use.
Okubadejo who was flanked by the Commissioner for Budget and Planning, Olaolu Olabimtan, said out of the N142bn debt inherited from the previous administration, $121m was foreign debt.
He said the previous administration also failed to declare the pension and gratuity debt profile of the state, adding that the development had also contributed to the debt profile of the state.
“When we came in 2019, the total debt profile of Ogun State was about N142billion, the foreign debt component of that was $121m, just take that $121m at N450 per dollar today to N220 per dollar in 2019, there is an exchange rate implication on that $121m debt.
“When we came in 2019, we saw that the pension and gratuity liabilities of the state were not in the books. The liabilities were not booked in the debt profile of the state in 2019”, Okubadejo said.
According to him, the fact that Lagos State has the highest debt profile does not make it a poor state.
Okubadejo said, “There seems to be a lot of misconceptions about debts generally. You cannot talk about debt in isolation. You cannot generally compare debts of one state to the other without doing some very in-depth analysis because the sizes of the economies of states are different.
“If two states have the same level of debts, the question you need to ask yourself is, ‘is the state, based on its size of economic activity able to withstand this debt’?
“It is wrong to compare the debt profile of Ogun to any other state without taking into consideration these things. We also have to look at debt service. Debt service in a nutshell is: what is your capacity to carry this debt? The only means of carrying capacity is your revenue.
“It is not debt that is the problem, but what you do with the debt that is the issue and the favourable terms you get for those debts and whether the debts will help stimulate economic activities.”
Article first published on the Punch Website