The administration of Oyo State Governor, Seyi Makinde, has spent a staggering N20 billion in just nine months of the 2024 fiscal year on servicing the state's public debt. This amount surpasses the combined budget allocated for critical sectors such as healthcare and infrastructure, raising concerns among stakeholders about the state’s financial priorities.
According to official figures from the Oyo State Ministry of Finance, the N20 billion spent on debt servicing represents a significant portion of the state’s total expenditure. This amount exceeds the funds allocated for key development areas, including healthcare, infrastructure development, and education. The expenditure on servicing debt in the current fiscal year is seen as a reflection of the ongoing financial pressures the state faces, primarily due to long-standing obligations accumulated from previous administrations.
Governor Seyi Makinde, in response to concerns about the state's mounting debt burden, has acknowledged the challenge of managing public finances while continuing to deliver on developmental promises. However, he reiterated his commitment to investing in infrastructure and public services, despite the heavy debt servicing load.
"I remain dedicated to improving the welfare of the people of Oyo State, particularly through investments in healthcare, education, and infrastructure. The financial challenge we face in servicing our debts is one that requires careful management to ensure sustainable development for future generations," said Governor Makinde during a recent briefing.
In a related development, the state's Ministry of Health has raised concerns about the constrained budget for healthcare services, which has been impacted by the high debt servicing demands. The healthcare sector has historically been underfunded in the state, with inadequate infrastructure and medical facilities hampering the delivery of essential services to residents.
Furthermore, key infrastructure projects aimed at improving road networks, public transportation, and urban development are facing delays as financial resources are diverted toward meeting debt obligations. Despite these challenges, the governor assured that ongoing and planned projects in these sectors would continue to be prioritized, even in the face of the fiscal constraints.
Economists and financial analysts have raised alarm over the increasing debt burden in Oyo State, calling for a comprehensive strategy to manage and reduce the state's indebtedness. Some have suggested that more emphasis be placed on increasing revenue generation through diversification and improving fiscal discipline.