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The Osun State Government has explained that its decision to seek funds from banks to finance some of the capital projects contained in this year's budget was based on rational patriotic reasoning.

A government statement issued on Friday by the Chief Press Secretary to the Governor, Lasisi Olagunju, described the reaction of the opposition Action Congress (AC) to the decision to take the bank facilities as very unfortunate and a product of bad politics, especially when the governor´s letter to the House of Assembly also contained a list of projects to be executed with the funds.

The government explained that all the projects listed along with the request for the bank facilities were approved by the state House of Assembly in the year 2010 budget and it is just natural that government should explore other ways of financing the projects in the light of the dwindling regular revenue from the federation account which has been on an average of N1.35 billion every month.

“It is common knowledge that monthly allocations to the state are dwindling and are not enough to pay salaries of workers and pensions to retirees. Monthly workers salaries hover around N1.3 billion while monthly pensions stand between N350 million and N400 million. Although government has grown the internally generated revenue from the inherited figure of less than N100 million per month to over N350 million, government still feels this figure is low but Osun is a peculiar state where no government can  introduce new taxes or raise rates without the welfare of the people being adversely affected. Short term loan facilities such as the one being sought are necessary therefore to execute capital projects and get the state going while other measures are being taken to get the economy of the state improved.

'Indeed, this government has shown commitment to best practices in management  of public finances over the years as seen in the number of roads, water schemes, rural electrification and other projects executed so far without borrowing a kobo. Even when it has been difficult, government has never owed workers salaries and allowances and will not toe the line of its predecessor which embarked on retrenchment of thousands of workers for it to build offices. When it was necessary for government to borrow money to build Osun State University, it did so and paid every kobo back within eleven months,” the statement said.

While explaining that the loans would not constitute any burden to any future generation as its management and repayment schedule had been properly worked out with the banks, the government told the opposition AC that it had no moral right to condemn the decision to seek the bank facilities given the antecedents of its leaders both in Lagos and in Osun.

“It is necessary for us to remind the AC that this government inherited from the Bisi Akande administration debts totalling about N6billion, which included N2.5billion unpaid gratuities of workers forcibly retired, three months of workers unpaid salaries and sundry other liabilities which were inherited and dutifully settled by the Oyinlola government.'