Lawmakers in the Oyo State House of Assembly have defended the approval of a ₦100 billion loan facility for the state government. They described recent criticisms of the decision as products of ignorance and political mischief. The move came as the Oyo State Government pushes to fund critical infrastructure across the region.
They explained that the facility, obtained from United Bank for Africa (UBA) Plc, would provide additional funding for critical infrastructure projects. Meanwhile, a separate ₦300 billion facility would enable the government to refinance an existing contractors’ finance facility obtained from Access Bank at a lower interest rate.
Understanding the Loan Facility Structure
Hon. Gbenga Oyekola, representing Atiba State Constituency, said concerns that Governor Seyi Makinde was imposing excessive financial obligations on the incoming administration failed to consider the purpose and structure of the financing arrangement.
“People may think the governor is making a huge financial commitment for the incoming administration, but my colleague has explained the reasons behind the House’s approval of the loan,” Oyekola said.
He explained that the existing ₦300 billion contractors’ finance facility attracted an interest rate of 26 per cent under Access Bank, while UBA had offered to take over the facility at 22 per cent, representing a four-percentage-point reduction.
Oyekola said the refinancing arrangement should be considered alongside the state’s infrastructure needs. He noted that the additional ₦100 billion was intended to support ongoing development projects rather than merely increase the existing borrowing.
“So, in essence, we are talking about ₦100 billion in additional financing. My point is that both the ₦100 billion and the ₦300 billion should be a shared responsibility,” he said.
The Debate on Public Projects
The Atiba lawmakers acknowledged the government’s infrastructure efforts but expressed concern about the politicisation of development projects. They focused heavily on the Rashidi Ladoja Circular Road, whose cost he described as substantial.
He argued that public discussions about infrastructure should consider project costs, expected benefits and the need to ensure that development spending reaches communities across the state.
Also defending the approval, Hon. Sunkanmi Babalola, Deputy Majority Leader of the House and Chairman of the Committee on Appropriation, Finance and State Economic Planning, representing Egbeda State Constituency, urged critics to seek clarification before commenting on issues they might not fully understand.
“Where there are issues they do not fully understand, it is better to seek clarification calmly so that we can explain the situation as an institution,” Babalola said.
Benefits of the Refinancing Arrangement
He explained that reducing the interest rate on the existing ₦300 billion facility from 26 to 22 per cent could lower the government’s borrowing costs and potentially free up resources for other developmental priorities.
“The difference is four per cent. When you calculate four per cent of ₦300 billion, you will realise that it represents a substantial amount of money. The savings from the lower interest rate can be channelled into other developmental programmes that will benefit the people of Oyo State,” he said.
Babalola added that the executive returned to the Assembly for approval after obtaining the improved refinancing offer. He described the process as a demonstration of respect for legislative procedure and democratic governance.
He also dismissed concerns that the additional loan facility would be used for recurrent expenditure. He insisted that it was intended to support critical capital projects across the state.
“It is important to emphasise that this money is not intended for overhead expenditure or consumables. It is meant for critical capital projects across Oyo State,” he said.
Key Infrastructure Targets for Oyo State Government
Among the projects cited by the lawmakers were the Ladoke Akintola University of Technology (LAUTECH) Teaching Hospital in Oyo town, the Rashidi Ladoja Circular Road and the Ido–Eruwa Road. They also highlighted other ongoing road and healthcare infrastructure projects across the state.
Babalola referenced the Gintola International Airport project in Ibarapa, expressing the government’s commitment to completing it before the end of Makinde’s administration in 2027.
He said adequate funding was necessary to complete ongoing projects, improve connectivity, expand access to public services and ensure that communities outside Ibadan benefited from government investment.
