Weak naira responsible for Osun’s high debt service rate: State Govt
The Osun government says the naira devaluation is responsible for the state’s high debt service payment.
Kolapo Alimi, the Commissioner for Information and Public Enlightenment, in a statement on Wednesday in Osogbo, said the clarification became necessary due to the report by the National Bureau of Statistics(NBS) listing Osun as number ten among states with high debt service payments.
Mr Alimi said the apparent rise in the monthly loan repayment on the state’s foreign loan was not a result of any new borrowing but a consequence of the nation’s weak currency following the naira devaluation.
The commissioner noted that the repayment of foreign loans was usually made based on the prevailing exchange rate of naira to the United States 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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