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Governor Gboyega Oyetola of Osun State would be engaging the capital market community on areas of support to finance projects and invest in the state tomorrow, November 07, 2019.  

The governor would also be honoured by the management of the Nigerian Stock Exchange (NSE) with its Closing Gong Ceremony, in commemoration of the event. 

A bond is a debt investment that an investor like NSE loans to an entity (corporate or governmental body) for a defined period of time (long-term), at a variable or fixed interest rate. The purpose of such funds is to finance capital projects in order to bridge the revenue shortfalls of the states. 

Ekiti, Osun, Delta, Imo, 9 others raise over N500 billion bonds in 10 years 
Governor Gboyega Oyetola

What it means

Usually, when state governments’ top officials visit the NSE, the purpose of such visit is likely to feel the pulse of stockbrokers and other stakeholders on whether it is safe for the state to raise new bond from the bourse or to brief them on how it spent the fund raised earlierIn the case of Osun State, there are greater chances that the state would soon raise fund through bond in the bourse.  

Is this a good move at this time?

There are concerns that the financials/liquidity level of the state may not agree with the move of the top officials of the state, which allegedly has been struggling to pay salaries of its workers. 

[READ MORE: Access Bank lists N30 billion bonds on NSE]

Nairametrics huwaii

Data obtained from the National Bureau of Statistics by Nairametrics disclosed that while the state’s internally generated revenue (IGR) stood at N10.20 billion as at the end of first half of 2019, its total external debt and total domestic debt stood at $99.08 million and N148.10 billion by the end of 2018.   

Another question which the capital market stakeholders would likely ask Governor Oyetola is whether the N30 billion raised about 10 years ago has been judiciously used. Hopefully, the Governor would answer the question “without mincing words. 

Standard chartered


Like Governor Oyetola, Governor Kayode Fayemi visited the bourse last August, telling stakeholders and whoever that cared to listen that the land of honour had judiciously used and refunded the fund raised via bond in 2014  

While speaking at the Facts Behind the State Economy at the NSE, Fayemi disclosed that the state had cleared all its outstanding bonds listed on the NSE. 

Standard chartered

Though the governor didn’t disclose whether the state would raise fund via bond, his body language did when he was asked the question. 


He responded, “We deemed it necessary to visit the stock exchange to inform the market about the level of development and the projects we intend to embark upon. We are also excited with the development in the stock exchange for providing and sustaining the channel of providing long term funds for development.” 

[READ MORE: How Diaspora Bonds Work and Benefits]

Governor-Fayemi-NSE, Ekiti, Osun, Delta, Imo, 9 others raise over N500 billion bonds in 10 years 

The Controversial N567 billion bond raised by 14 states 

Findings disclosed to Nairametics that about N700 billion was raised by 14 states of the Federation through bonds issued by the Stock Exchange about 10 years ago and part of the funds cannot be properly accounted for as many of the capital projects, for which they were originally meant, are not completed and some are abandoned. 


Details of the bonds

The past administrations in LagosKogi, Niger, OsunNassarawa, Rivers, Delta, Kwara, Akwa Ibom, Abia, Enugu, Ebonyi and Imo, raised the bonds at different times, except for Ekiti, whose governor returned to office in 2018.  

This has also led to a situation where the projects for which the bonds were originally taken, have been abandoned because the governors’ successors, who are mostly from the opposition parties or have different views, have become incapacitated to carry on with such projects. 

Within a space of eight years, Osun State has raised N30 billion; Lagos, N277 billion; Delta, N50 billion; Edo, N25 billion; Kwara, N17 billion; Gombe, N20 billion; Niger, N15 billion, Plateau, N28.2 billion, and Kaduna, N8.5 billion.  

Others are Benue, N13 billion; Ebonyi, N16.5 billion; Ondo, N27 billion; Ekiti, N25 billion and Bayelsa, N50 billion, among others. 

Investigations also disclosed that eight of the states, which floated their bond programmes at the NSE, raised over N600 billion from the emerging bourse to fund specific capital projects. 

The eight states are Ekiti, Lagos, Kogi, Niger, Osun, Nassarawa, Rivers and Delta. 

The amount raised and expected to be refunded with interest by most of the states does not, however, reflect the revenue-generating capacity of the states. 

There are allegations that part of the funds had allegedly been diverted to other areas of interest to the ex-governors, including political activities and other frivolities. 

Some of the states were set to raise bonds from the market, in spite of the fact that some of their governors had less than a year to complete their tenures. 

This development has, however, generated concern among political and economic watchers. Their fear is that if a state, whose governor has less than two years in office, raises money from the bond market, there is hardly any assurance that a chunk of the fund would not be diverted. 

[READ FURTHER: Central Banks move to aggregate investments in green bonds]

Governor-Fayemi-NSE, Ekiti, Osun, Delta, Imo, 9 others raise over N500 billion bonds in 10 years 

Critics’ allegations  

In line with the arguments of the observers, critics also believe that the said funds were not judiciously used for their intended purposes. 

Some of them, who are aides of the administrations across the states that took over from the ex-governors, alleged that the funds were diverted by the former governors for other uses such as financing electoral campaigns, which some of them eventually lost to the opposition. 

In Ekiti State, Governor Fayemi had promised to use a chunk of the N25 billion bond raised in 2014 to construct a new governor’s office and government house, a civic centre, a 10,000-seater state pavilion and rehabilitation of the Ilawe-Igbaraodo– Iboji road, among others. 

However, his successor (former Governor Ayodele Fayose) refuted the governor’s claims. 

The Media aide to FayoseLere Olayinka, disclosed that the projects were abandoned by Fayemi some months to the 2014 governorship election in the state. 

He alleged, “The projects were abandoned and Fayemi and his men didn’t leave any money behind to complete them. N1.2 billion is being deducted monthly from the state’s allocation to service debts that he took in the course of his four years. That is responsible for the inability of Fayose’s administration to pay salaries.”  

The governor’s aide further alleged that the rehabilitation of the Ilawe-Igbaraodo-Ibuji Road, which was awarded for rehabilitation by former governor Segun Oni’s administration at N200 million, was raised to N894.6 million by the administration. 

In Delta State, out of the N50 billion raised by former governor Emmanuel Uduaghan in the bond market, the total actual proceed received by the state was N46.60 billion, indicating that about N3.40 billion was paid to regulatory agencies and parties to the bond. 

But a top source in the state’s ministry of finance, who preferred anonymity due to the sensitivity of the issue, disclosed that N41.44 billion, instead of N46.6 billion, was reported to have been spent from the bond proceeds on the planned projects. 

“The balance of N5.16 billion was missing from the bond proceeds. The report of the Hand-over Committee revealed that only a little over N1 billion was left in the bond account. The balance of the fund has not been accounted for by the officials of the Ibori-led administration, he disclosed.  


  1. Today I bought shares in the stock symbol URBT. Have you heard of it? Seems like a good investment but URBT is looking to revamp the company as a whole.


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