The Ogun State Government has addressed concerns raised by residents regarding the significant increase in the state’s debt profile, asserting its capability to repay its debts. Commissioner for Finance, Dapo Okubadejo, conveyed this assurance during the presentation of the 2024 budget breakdown on Monday.
Okubadejo clarified that the state government has not exceeded its debt limit, responding to worries raised by residents and political observers about the state’s debt profile, which the Debt Management Office (DMO) reported as N270 billion.
Providing further details, Okubadejo, who also serves as the Chief Economic Adviser to Governor Dapo Abiodun, stated, “There are external debts of N55 billion and internal debts of N82 billion. Some of these internal loans are also used for working capital requirements, but almost 80 – 90 per cent of the debt is for funding capital expenditure that will increase the revenue capacity and the economic base of the state.”
Addressing concerns about the debt position, Okubadejo emphasized that the state is cautious in selecting types of debt, staying well below the sustainability ratios of debts. He stressed the importance of obtaining affordable debt to fund infrastructure projects, expressing confidence in the state’s capacity to repay.
Regarding the financing of the 2024 budget, Okubadejo highlighted the state’s projection to generate N240 billion from its internally generated revenue, emphasizing that Ogun State is less dependent on federal allocation and aims for economic and financial independence. He underscored the critical nature of executing the 2024 budget, noting that the state’s revenue is increasing while its debt profile is decreasing, with debts being strategically utilized to fund capital expenditure for state development.