The Osun State Government has firmly denied rumors of plans to secure a new loan, attributing the recent increase in its monthly foreign debt repayments to currency fluctuations rather than new borrowing by the current administration.
Kolapo Alimi, Commissioner for Information and Public Enlightenment, made this clarification in a statement on Tuesday in Osogbo.
His comments followed a National Bureau of Statistics (NBS) report, which ranked Osun as the 10th state with the highest debt service payments.
According to the NBS report, Osun State’s external debt service costs surged to N3.4 billion in 2024, up from N1.57 billion in 2023—a significant rise of N1.83 billion, or about 116 percent.
The report also noted Osun’s growing financial obligations despite its cultural prominence, including the famous Osun-Osogbo Festival.
Alimi explained that the increase in foreign debt repayments is due to the fluctuating exchange rate between the Naira and the U.S. Dollar, not new loans.
“The public is reminded that foreign loan repayments are made based on the prevailing exchange rate of the Naira to the US Dollar,” he stated.
He attributed the state’s current debt burden to the previous administration’s 12-year tenure under the All Progressives Congress (APC).
Alimi further noted, “As repayments are adjusted according to the prevailing exchange rate, there is an inevitable rise in the Naira value of monthly loan repayments for foreign loans across all states.”
He emphasized that the increase in debt service costs is a nationwide issue affecting all states and the Federal Government, not just Osun. Assuring the public of the state’s financial stability, Alimi reaffirmed that there are no plans for new borrowing.
