The Osun state government has attributed its high debt service payments to the devaluation of the naira.
Recall that Naira depreciated to N1,660 per dollar in the parallel market, down from N1,645 per dollar recorded last Friday.
Kolapo Alimi, the Commissioner for Information and Public Enlightenment, explained this in a statement issued on Wednesday in Osogbo. The clarification follows a report by the National Bureau of Statistics (NBS) which ranked Osun as the tenth highest among states with significant debt service obligations.
Alimi emphasized that the increase in the monthly repayments for the state’s foreign loans is not due to new borrowing but rather a result of the naira’s weakened value. He pointed out that repayments on foreign loans are calculated based on the current exchange rate between the naira and the US dollar.
“It is also important to put on record that Osun state was plunged into high local and foreign indebtedness in the 12 years of the last administration in the state.
“As the repayment is done in line with the prevailing rate, there is an increase in the Naira value of monthly loan repayment on the foreign loans portfolio of all the states of the federation.
“The inevitable increase, therefore, is not only peculiar to Osun; rather, it is applicable to all the states and the federal government.
“The public is assured that the state financial management is responsible and sustainable without any new indebtedness,” he said.
(NAN)
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