It seems like with each passing month, Osun state is descending deeper and deeper into the abyss of debt.
After receiving up to N2.422 billion in FAAC allocations like every other normal state in the federation, its debt repayment obligations gobbled up N2.416 billion, leaving the state – which is 3.5 million people large – with only N6 million (or $18,700).
Since the state failed to look inward for innovative ways to enhance economic viability and boost its IGR when the going was good, it now has to compulsorily do it for the sake its very life.
With a State Investment Company (OSICOL) that boasts portfolio companies that manufacture table water and train security guards, the state will surely need to raise its innovation game in order to stay afloat.
Osun state is now entering into unchartered waters. And at this stage, all advice is welcome.
Suggestions that were previously unheard of among politicians and civil servants, are now ‘actually not that bad’.
Two of such suggestions have sizzled to the top.
One suggestion is for the state to go into administration – where the federal government intervenes and runs the state on behalf of the state.
Another suggestion is for the state to shop itself and its assets to private investors, in exchange for some cash.
One recent development could be pointing to the fact that ‘Ogbeni’ is leaning towards option two.
The governor’s appointment in January of billionaire Folorunso Alakija, the 3rd richest black woman on the planet as the chancellor of the state’s university is very telling. With this appointment, Alakija will be the first female chancellor of a university in Nigeria.
Ogbeni says that paying salaries despite the N6 million FAAC receipt may not be a problem, as the state is aggressively trying to up its IGR game. According to a government spokesman Semiu Okanlawon, “Osun state under Aregbesola did not have to wait for the day it would get N6 million as allocation before proffering solutions towards sustainable economic self reliance. Hence the state has “sought to attract investments through the provision of enabling environment”.
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According to the spokesman, the state has survived due to prudent management and “creative” infrastructure financing.
Ogbeni will be needing more creative financing going forward, and he will also be needing more help from Alakija and her billionaire friends.