Lawmakers in the Oyo State House of Assembly defended the state government’s request for an additional ₦100 billion loan, calling criticisms of the approval products of ignorance and political mischief.
The lawmakers said the decision was informed by the need to refinance an existing ₦300 billion commercial loan at a lower interest rate and secure additional funds to complete ongoing critical infrastructure projects across the state.
The lawmakers’ defence comes amid public debate over the financial implications of the additional borrowing and the government’s plans for completing ongoing projects before the end of Makinde’s tenure.
While Assembly members argued that refinancing at a lower interest rate would reduce the cost of servicing the existing loan, the overall fiscal implications of the additional borrowing would depend on the terms of the new facility, the repayment schedule, and the government’s capacity to meet its obligations.
They maintained that the request followed due legislative process and was aimed at reducing borrowing costs while providing resources for ongoing development projects.
Defending the loan arrangement, Hon. Gbenga Oyekola, who represents Atiba State Constituency in the 10th Oyo State House of Assembly, said concerns that Governor Makinde was committing the incoming administration to excessive financial obligations failed to take account of the circumstances surrounding the borrowing.
“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 government had borrowed ₦300 billion from Access Bank at an interest rate of 26 per cent but had subsequently received an offer from United Bank for Africa (UBA) to take over the facility at a reduced rate of 22 per cent.
According to him, the arrangement would enable the government to consolidate the existing borrowing with UBA at a cheaper interest rate, potentially reducing the cost of servicing the loan.
“The government borrowed ₦300 billion from Access Bank at an interest rate of 26 per cent.
“However, UBA is now offering an interest rate of 22 per cent and is willing to take over the loan from Access Bank, allowing the government to consolidate its borrowing with UBA at a cheaper rate. That is the reason for the decision to move the loan to UBA,” he said.
Oyekola stressed that the existing ₦300 billion facility and the additional ₦100 billion should be considered within the broader context of the state’s infrastructure needs, rather than treating the new borrowing in isolation.
“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 Atiba lawmaker acknowledged the government’s efforts to provide infrastructure but expressed concern over what he described as the politicisation of development projects, particularly the Ibadan Circular Road.
“The government is making efforts to provide infrastructure, but it is disheartening to see people playing politics with development and opposing projects that are meant to improve their lives.
“The Circular Road project is gulping a substantial amount of money, and the scale of the expenditure is a source of concern,” he said.
He argued that the scale of investment in major infrastructure projects made it necessary for public debate to focus on the benefits, costs and distribution of development across the state.
Oyekola’s position also pinpointed the need to ensure that infrastructure spending benefits communities beyond the areas hosting the most prominent projects, a concern he said should inform discussions about the allocation of resources.
The refinancing proposal, as explained by the lawmakers, would involve moving the existing ₦300 billion loan from Access Bank to UBA at a lower interest rate, alongside the proposed additional ₦100 billion financing.
The potential savings would depend on the final terms of the refinancing, including applicable fees, repayment schedules and other charges.
Oyekola further used the medium to make a passionate appeal to the Governor on neglecting the Atiba State Constituency in an ongoing inner road project in Oyo Federal Constituency, urging the Governor to make his constituency inner road a priority, as residents and commuters experience vehicle damage, risk of accidents, physical discomfort, economic meltdown, reduced access to essential services, as well as physical and emotional burdens while undermining safety.
They maintained that the ultimate goal should be to ensure that public borrowing translates into completed projects and tangible benefits for residents across Oyo State.
Earlier, Honorable Babalola Olasunkanmi, Deputy Majority Leader of the House and Chairman of the Committee on Appropriation, Finance and State Economic Planning, representing Egbeda State Constituency, said critics should seek clarification before making comments on matters 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,” Olasunkanmi said.
He stressed that the House’s primary responsibility was to ensure that the dividends of democracy reached residents across the state’s various constituencies.
According to him, the government had previously secured legislative approval for a ₦300 billion loan from a commercial bank at an interest rate of 26 per cent but subsequently received a more favourable offer from another bank at 22 per cent.
“The difference is four percent. 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.
Olasunkanmi explained that the executive arm of government returned to the Assembly to seek approval after obtaining the improved offer, adding that the procedure demonstrated respect for democratic governance and due process.
“The government had earlier approached the House for approval to obtain the loan from another commercial bank, but circumstances changed when a better offer became available.
“The executive therefore considered it necessary to return to the House and seek approval for the revised arrangement,” he added.
The lawmaker also dismissed concerns that the funds would be used for recurrent expenditure, insisting that the proposed borrowing was intended to support 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.
He listed ongoing infrastructure and development projects across Ibadan, Oke-Ogun, Ogbomoso, Oyo and Ibarapa as examples of the government’s interventions, arguing that the projects demonstrated the need for adequate funding to sustain development.
In Ibarapa, he cited the Ladoke Akintola University of Technology teaching hospital and the Gintola International Airport projects, saying the government was committed to completing the airport before the end of Governor Seyi Makinde’s administration in 2027.
He also referenced the Saki–Igboho Road, the Afijio Road project and other road and healthcare infrastructure projects across the state.
According to him, the projects are intended to improve connectivity, expand access to healthcare and ensure that communities outside the state capital benefit from government investment.
“Our governor is widely described as a talk-and-do leader, and he has pledged to ensure that these projects are executed.
“However, development requires adequate funding. Without the necessary financial resources, even well-intentioned projects may not be completed,” Olasunkanmi said.
In his brief remark during the plenary session before the House approved the governor’s fresh loan request, the Speaker, Rt. Honorable Adebo Ogundoyin said it was important to support the state government in accomplishing an impressive budget performance by providing funds to complete ongoing projects across the state.
He assured that the House will continue to provide legislative oversight on ongoing projects and implementation of the funds to ensure that the people of the state continue to enjoy dividends of democracy.
