The Osun government says the devaluation of the Naira is responsible for the state’s high debt service payment.
Mr Kolapo Alimi, the Commissioner for Information and Public Enlightenment, in a statement on Wednesday in Osogbo, said that the clarification became necessary due to the report by the National Bureau of Statistics(NBS) listing Osun as number ten among states with high debt service payments.
Alimi said that the apparent rise in the monthly loan repayment on the state’s foreign loan was not as a result of any new borrowing but a consequence of the nation’s weak currency following the devaluation of the Naira.
The commissioner noted that the repayment on foreign loans was usually done based on the prevailing exchange rate of the local currency, that is Naira to the United States dollar.
“It is also important to put on record that Osun state was plunged into high local and foreign indebtedness in the 12 years of the last administration in the state.
“As the repayment is done in line with prevailing rate, there is an increase in the Naira value of monthly loan repayment on foreign loans portfolio of all the states of the federation.
“The inevitable increase, therefore, is not only peculiar to Osun, rather, it is applicable to all the states and the Federal Government.
“The public is assured that the state financial management is responsible and sustainable without any new indebtedness,” he said.