Osun Blames High Debt Service Rate On Weak Currency

Amid the National Bureau of Statistics’ revelation that Osun State occupies the tenth position among states with high debt service payments, the state government has blamed the lingering indebtedness on the weak national currency.

A statement by the commissioner for Information and Public Enlightenment, Oluomo Kolapo Alimi, stated that the apparent rise in the monthly loan repayment on the state’s foreign loan is not a result of any new borrowing but a consequence of the nation’s weak currency brought about by the devaluation of the naira.

Alimi noted that the NBS report picked by the opposition to tackle the Osun government platform had noted the following: “Osun State, located in Nigeria’s southwest, is culturally known for the Osun-Osogbo Festival. 2024 Osun recorded N3.4 billion in external debt service costs, up from N1.57 billion in 2023. This represents an increase of N1.83 billion or about 116%.”

“The public would kindly recall that repayment on foreign loans is usually done based on the prevailing exchange rate of the local currency (Naira) to the US dollar.

“It is also important to put on record that Osun state was plunged into high local and foreign indebtedness in the state’s 12 years of APC government.”

According to him, as the repayment is made in line with the prevailing rate, the naira value of monthly loan repayment on the foreign loans portfolio of all the federation states increases.

Alimi maintained that the inevitable increase in debt servicing is not peculiar to Osun but applies to all the states and the federal government.

He assured the public that the state financial management is responsible and sustainable without any new indebtedness.