Over the years, I’ve never been a fan of loan, in fact, I’ve written and preached against accruing loan just because I don’t see it as a best alternative, but there are probabilities that borrowing might be a last alternative.
Considering loans as viable and feasible alternative, as a prudent citizen of a State, two things readily come to mind, the personality of the leader that borrows the money and the target for the usage of the said loans.
In political economy, it is explicit that we have two types of loans or debt, we have the progressive loans and the regressive loans, the difference between the two loans is clear enough, progressive loans are used for capital expenditures while regressive loans are mostly used for concurrent expenditures, having loan for capital expenditures is one of the core tenets of liberal economy, even the neoliberal economists also applaud the action, but taking loans for concurrent expenditures spells a doom for futurity.
That former Governor Abiola Ajimobi increased the debt of Oyo State by about 120% without anything to show for it is a thing to worry about, the 8 years of the previous administration did not add a value that equals the amount of money borrowed, that made it to be regressive in nature. Secured loans by Ajimobi Regime were used to service inflated projects that didn’t see the light of a day, in some cases, contracts were awarded to faceless contractors and billions were paid, N7 Billion awarded to a faceless contractor for Ibadan-Moniya-Iseyin is a good example of this abnormality. To add salt to an injury, a Commissioner under Ajimobi, Adeniyi Olowofela admitted that about 40 percent of the loans were used to pay Pensions and Gratuities. What a retrogressive act! It added no value to the state economy.
The Federal Government of Nigeria is also culpable of this tragic policies, President Mohammadu Buhari has increased Nigeria debt by almost 110% with little or nothing to show for it. I was expecting Federal Government to borrow loan for the revivification of Ajaokuta Steel Mill, this could have brought Nigeria back to limelight and helped in diversification of the economy already in conundrum. Ajaokuta Steel Mill is capable of employing more than 500,000 skilled and unskilled labours, let us not talk about thousands of people that would be meaningfully engaged through the value chains, but Government has paid little or no attention to this aspect of economy.
When I heard that Governor Seyi Makinde had sought for approval of loans from Parliaments, I decided not to talk about it because I was waiting for information on what the loans would be used for, guess what? I was not disappointed, the loans were secured to facilitate applaudable projects that would better the lot of the people and encourage economic development in Oyo State. Another fact that made the loans to be a welcome idea is that it is Internally sourced from Commercial Banks not foreign loans.
Some weeks ago, Governor Seyi Makinde visited Akufo Farm Settlement and promised to upgrade it to Agriculture Estate, knowing fully well the roles that agriculture played in the development of Western Region in the First Republic, one would have no other option than to encourage and support this noble decision, substantial part of the loans would be used for this upgrading, this would allow Oyo State to be self-reliant in food productions and also make Oyo State a supplier of farm produce to both neighboring states and foreign countries, not forgetting that thousands would be directly and indirectly employed.
Also, many tangible projects that would be of great economic and social values to the people of Oyo State are captured in the loans, projects like the abandoned Ibadan-Moniya-Iseyin Road and Iwo Road Interchange are critical to the economic progress of Oyo State.
To add to the good work of His Excellency, I will suggest that attention should also be given to tourism in Oyo State. Chinese Economy is booming everyday because of the diversification of the economic activities. In 2018 alone, Tourism generated about 12% of the total GDP in China, Toursim has become a new driving force in the economy, more than 20 million people are gainfully employed in China through tourist activities. From the popular Great Wall of China to Silk Road and other historical artifacts have contributed enormously to the progress.
Oyo Empire had a rich history beyond the shore of Africa, the ancedence of the Old Oyo Empire was adequately noted and documented by even the colonialists, there are millions of foreigners of African Descents that are yearning to behold some of the artifacts that are related to our heroic ancestors, reviving Old Oyo National Park and making it a Resort could add value to Oyo State. Packaging is all that is needed, Old Oyo National Resorts is capable of boosting the IGR of Oyo State if properly attended to. I hope one day, adequate attention would be given to this.
Ogunwoye Samson Gbemiga
Ogbomoso, Oyo State.
(Master Student, Political Economy and Development Studies, University of Abuja).