Oyo State Borrows N62 Billion in Nine Months, Spends Nearly Half of IGR on Debt Servicing

A review of Oyo State’s 2024 budget performance has revealed that the state government borrowed N62 billion in the first nine months of the year, while spending N20.5 billion on debt servicing over the same period—amounting to 44.4% of its internally generated revenue (IGR).

The figures, drawn from the state’s official budget performance documents, highlight a growing concern over the sustainability of Oyo’s debt profile and its impact on critical public services.

Despite the significant borrowing, only N2.9 billion was allocated to capital expenditure in the education, science, and technology sectors during the period under review. The state’s health ministry fared even worse, receiving just N43.6 million for capital projects. Meanwhile, the Rural Water and Sanitation Agency saw a capital spend of a mere N3.5 million.

Further analysis showed that only N59.8 million was used for the rehabilitation and repair of water facilities, while no funds were allocated for the rehabilitation or repair of hospitals and health centres.

In stark contrast, the government spent N10 billion on road repairs—half the amount spent servicing public debt. Flood and erosion control projects received just N200 million.

Mounting Concerns Over Debt Dependency

The figures have sparked renewed concern among fiscal policy experts and development analysts, who warn that overreliance on loans to finance state budgets is becoming increasingly detrimental. High debt servicing costs, they argue, are crowding out vital capital investments in healthcare, education, infrastructure, and essential public services.

“There is an urgent need for a more strategic approach to fiscal management,” said one public finance expert. “Excessive borrowing may offer short-term relief, but it undermines long-term development and leaves future generations burdened.”

While the state government has yet to respond to the findings, critics are calling for increased transparency and accountability in the budgeting process, as well as greater prioritization of projects that directly benefit residents.

The trend observed in Oyo State reflects a broader pattern across several Nigerian states, where ballooning public debt is increasingly competing with the delivery of meaningful socio-economic development.