The Osun State Government has come out to clarify the recent report by the National Bureau of Statistics (NBS) that listed the state as one of the top ten states with high debt service payments.
According to the Commissioner for Information and Public Enlightenment, Kolapo Alimi, the state’s high debt service payment is not a result of new borrowing but rather a consequence of the naira devaluation.
In a statement released on Wednesday in Osogbo, Alimi explained that the repayment of foreign loans is usually made based on the prevailing exchange rate of naira to the United States dollar. He noted that the apparent rise in the monthly loan repayment on the state’s foreign loan is due to the nation’s weak currency following the naira devaluation.
Alimi emphasized that the state’s financial management is responsible and sustainable, with no new indebtedness. He also highlighted that the state was plunged into high local and foreign indebtedness during the 12 years of the previous administration.
The commissioner assured the public that the increase in debt service payment is not peculiar to Osun State alone but is applicable to all states and the federal government. He explained that the repayment is done in line with the prevailing exchange rate, resulting in an increase in the naira value of monthly loan repayment on foreign loans.
This clarification comes as the state government seeks to address concerns over its debt service payments. With the naira devaluation being a major factor, the state government is working to ensure responsible and sustainable financial management.
