Under Makinde, Oyo Swims in Debts

Virtually, no government runs from debts. Even in the face of raking billions of internally-generated and publicly-entitled funds and grants; the people would always be in need and those funds would never be enough. So governments would crave for debts as deer pants for water. This makes one think securing debts is pathological and as though, genetically engineered into every government systems. 

 

Japan has the highest percentage of national debt in the world at 259.43% of its annual GDP. Yet, it is the home of the major technological innovations, like videogames. In fact, it has the great United States in one its borrowers’ list.

 

The US, who usually boats as the medallion of the world, owes the world’s biggest national debt in terms of dollar amount and its largest economy, which resolves to a debt-to GDP ratio of approximately 128.13%. The US’ government’s spending exceeds its income most years, and the US has not had a budget surplus since 2001. Perhaps surprisingly, the countries to which the US is most in debt are Japan, which itself has significant debt, and China, which is often viewed as the US’ greatest economic competitor.

 

China’s national debt is currently over 10 trillion USD—however, because of China’s massive economy, the country’s debt is only 68.06% of its GDP. China’s current debt level is a significant increase from 2014, when the national debt was 41.54% of the country’s GDP. An International Monetary Fund report from 2015 stated that China’s debt was relatively low, and many economists have dismissed worries over the size of the debt both in its overall size and relative to China’s GDP. China currently has the world’s second-largest economy and the largest population, with approximately 1,425,821,667 million people.

 

For Russia, the warring giant of both Asia and Europe, its debt ratio was one of the lowest in the world at 16.99% of its GDP in 2021—though the country’s war with Ukraine, which began in early 2022, will likely have some effect on this ratio. Russia is usually one of the ten least-indebted countries in the world. Russia’s debt is currently at a total of just over 302 billion USD. Most of Russia’s external debt is private.

 

In 2021, Spain, whose Isabella’s strong will led to the discovery of the America, has its national debt around 1,574.81 billion USD. For comparison, the Greek debt amounted to approximately 401.71 billion U.S. dollars that same year. And these are but to mention, few.

 

So, for all of these great countries to be in debt, ‘greater’ country like Nigeria cannot escape such an inescapable fate. Currently, Nigeria is grappling with debts that future generations, about ten of them, cannot completely service. According to the Debt Management Office (DMO), Nigeria’s total public debt rose to N87.38 trillion in the second quarter (Q2) of 2023, recording an increase of 75.29 percent.

 

This represents a N37.53 trillion increase in total public debt, compared to the N49.85 trillion reported at the end of the first quarter (Q1) of the year.

 

Debts are incorrigible for governments. But what’s corrigible is how to spend it. Nigeria, almost, every time, spends debts on servicing the pricey governance which consume SUVs for officials and peanuts for the people. Streetlights that bounce with yearly faults, boreholes that hate the tales of the Harmattan and asphaltic roads that get too quickly grimy; are often the only gifts Nigerians get from debts they must later pay. About 90 per cent of Nigerians that pay taxes don’t use SUVs. They don’t get electricity, wardrobe, fuel and feeding allowances. They don’t get salaries, up to N21m. They don’t get pensions, regularly. Yet, they must pay the debts the officials borrowed to service the Nigeria’s pricey governance.

 

The way Nigerian governments treat it, debts have been part of the necessary soul of survival for governments, it has no actual reflection on the people. Debts are for the officials but to be paid by the people.

 

This goes back to Governor Seyi Makinde of Oyo State. Though, the Governor was stylishly hyperbolic in his speech, he met only N126 billion debts as of March 31, 2019 according to figures from both DMO and NBS which was factchecked by Dubawa.org, a leading fact-checking hub in Africa.

 

The data released by the Debt Management Office (DMO) as of June 30 showed that Oyo’s foreign debt stood at $63.98 million (N51.36 billion) and N162.40 billion for domestic debt. This is far above what was left behind by the Late, Senator Abiola Ajimobi’s administration. In total, Oyo has N213.76 billion debts to pay. And even, with these debts, Governor Makinde thinks spending another worth of billions on SAfER palliatives that’s partly not free is still the best alternative to serve Oyo Citizens. By the end of his administration, Oyo may multiply its debts and takes the second position of 36 States with the highest debts after Lagos.

 

Last year, Oyo had N62.2bn internally generated revenue, making it the number 6 out of the 36 States with the highest revenue generation. But no matter the revenue efforts, running a state with a budget deficit is like living on borrowed time, where the consequences of overspending eventually catch up with the entire economy.

 

Governor Seyi Makinde is doing what he can, increasing the debts as much as he thinks best to gratify the pricey cost of governance and the people to the best of what he can; the debts already crossed N213.76 billion—the end shall justify the means for Oyo Citizens.

 

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