By Timothy Agbor, Osogbo
The Director General, Debt Management Office (DMO), Dr. Abraham Nwankwo, has disclosed that Osun state is one of the best states in the country with public debt management saying that its debt status was sustainable.
This revelation has thus issued the state a clean bill of health on its debt status contrary to insinuation in some quarters that Osun state is indebted to the tune of N350 billion.
Speaking to journalists during a three day retreat for members of the House Committee on Aids, Loans and Debt Management at MicCom Golf Hotel and Resorts, Ada, Osun State, Dr. Nwankwo maintained that the state has not borrowed beyond its capacity.
According to Nwankwo, who did not disclose the actual debt figure of the state, the state needed to be encouraged in term of management of debt because it remains one of the best debt management states in the federation.
It would be recalled that opposition parties, in particular the Peoples’ Democratic Party (PDP) and Social Democratic Party (SDP) had accused the Aregbesola led government of the All Progressives Congress (APC) of debt ranging between N300 billion to N350 billion.
While the state Chairman of the PDP, Alhaji Ganiyu Olaoluwa, claimed that Osun debt is now N300 billion; Mr. Segun Akinwusi, Social Democratic Party (SDP) governorship candidate claimed that the debt profile of the state has hit N350 billion.
But the DMO boss said that Osun State is one of the states in the federation with good public debt management adding that his office recognizes the state as the first state to take Sukuk and “by our plan, we are encouraging the issuance of Sukuk in Nigeria because we need to diversify the instrument in the bond market.
“We want to make sure that all segment of the society is captured in the bond market because there are some groups of people or individuals who do not want to participate in ordinary bond because of interest.
“Our office, DMO and others are working hard to introduce Sukuk in Nigeria hence we are delighted that Osun took the initiative and helped in introducing it in Nigeria, so by that Osun is one of the best states in public debt management in the country”.
He also stated that the nation’s debt GDP ratio has fallen from 22 percent to 13 percent adding that “our debt is sustainable because GDP is much lower now. However in spite of that government will continue to be very prudent, conservative in its spending”.
According to him, “from my submission, I told the lawmakers that the GDP ratio is about 12 percent and this includes both external and domestic debt for both the federal and state governments.
“I emphasis in my discussion with committee on aids, loan and debt management that focus should be on having more revenue to service debt and therefore even based of debasing of Nigeria GDP, our debt GDP ratio has fallen from about 22 percent to less than 13 percent. This does not mean that we are in a position to borrow more, because GDP has improves dramatically.
“However the poor attitude of Nigerians to pay their taxes as many enterprises in the country small and medium scale businesses that should be in the tax bracket and not in the tax bracket and because many Nigerians who should pay tax are not willing to pay their taxes, the tax revenue GDP ratio is low and from revenue that government is able to service the debt or borrows, therefore until our tax revenue to GDP ratio improves significantly, government will continue to be conservative in borrowing.
“So our debt is sustainable because GDP is much lower now however in spite of that government will continue to be very prudent and conservative”.