OYO Commissioner for Finance and Budget, Mr Bimbo Adekanmbi has explained that the N115 billion domestic debt of the state did not accrue from bank loans, but from the sum total of its indebtedness in gratuities and pensions, salaries, capital projects and budgetary deficit.
Out of the total indebtedness as at December 2016, he added that gratuities and pensions of N56 billion as well as salaries accounted for 80 percent while debt on capital projects accounted for the remaining 20 percent. This is just as he said the state was incapable of borrowing N100 billion, as speculated, because it could not meet the requirements to service such debt.
Adekanmbi gave these pieces of information during a press interaction on the financial status of the state, on Tuesday. Speaking, Adekanmbi stated that though the state would love to borrow to clear its debts, it was mandated to expand its Internal General Revenue (IGR) base and constrained by the federal government's embargo on state government's borrowing from commercial banks.
Though he noted that N150 million was spent monthly on clearing gratuities' arrears, he described as anomaly having salaries constituting 80 percent of its debt profile. On improving the state IGR from the current average monthly IGR of between N1.2billion and N1.6billion to the targeted N4billion, Adekanmbi mentioned plans to include selling lands, opening up Government Reserved Areas and widening the tax net.
Speaking further, he said that the state's workers would soon begin to get another round of salaries from 60 percent of the recent N7.9billion Paris Club refund, 100 percent of federal allocation and budget support facility. At this point, Commissioner for Information, Culture and Tourism, Mr Toye Arulogun, pointed out that the state government utilised 100 percent of federal allocation to pay workers that constitute two percent of the Oyo population.
In other comments, at the event, Adekanmbi emphasized the need for state's tertiary institutions to be self-sustaining, noting that subventions given by government were not meant to pay salaries but to support research. Overtime, he said that institutions had failed to justify the subventions they got, but were quick to attribute non-payment of salaries to non-release of subventions.