Osun Debunks Report Over Loan Portfolio

Staff December 12, 2013

AGAINST reports that the Osun state government’s fiscal responsibility is threatened, the state’s Commissioner for Finance, Wale Bolorunduro, has denied such reports saying that the state government is yet to take any multilateral loan (external debt) since it came to power.
According to Bolorunduro, there was a misinterpretation of a report on state’s borrowing, as published by the Fiscal Responsibility Commission (FRC).
He noted that against insinuations raised in a newspaper report, (not The Guardian), the state had published its financial statement for the year 2012 to prevent presumptions on the state’s financial status.
He said: “It is true Osun raised N30 billion and N11.4 billion from the capital market through issuance of bond and sukuk in 2012 and 2013 respectively. These are deliberate transparent approaches to raise funds from capital market. It is however scandalous to read that the state took N17.8billion from Infrastructure Bank.
“In the same vein, it is important to stress that the external debt being mentioned is part of the liabilities the current government inherited from the PDP administration. For avoidance of doubts, the current administration has not taken any multilateral loan (external debt) since it came to power.
He added: “Reference can be made to the full report of the Debt Management Office (DMO), which was recently circularised to all the states in the country. The report indicates states’ average solvency (a ratio of total debt to total revenue) to be 42.34 per cent, while Osun’s figure is 14.68 per cent.”
“In the same vein, state’s average liquidity ratio (ratio of debt service to FAAC allocation) according to the report is 12.3 per cent, while Osun’s ratio is 1.45 per cent. This is against a threshold of 40 per cent. Thus indicating Osun to be very solvent and liquid, a further indication of the state’s debt sustainability.”
THE GUARDIAN