By James Adamu
The Oyo State House of Assembly has approved a fresh N100 billion loan for Governor Seyi Makinde’s administration, alongside a N300 billion refinancing of an existing contractors’ loan, just months before his second term ends on May 29, 2027.
The approval, granted during plenary on Wednesday following a request by the governor, will allow the state to obtain the new facility from United Bank for Africa (UBA) Plc and transfer its existing N300 billion contractors’ finance facility from Access Bank to the same lender.
In his letter to the Assembly addressed to Speaker Adebo Ogundoyin, Makinde sought legislative approval for the two arrangements, which carry separate purposes and financial implications for the state.
The N100 billion facility is intended to provide fresh funding for critical infrastructure projects and accelerate the completion of ongoing developments. The N300 billion component, however, is a refinancing arrangement rather than additional fresh borrowing.
Under the refinancing terms, the existing contractors’ facility obtained from Access Bank at 26 per cent interest will move to UBA at 22 per cent, a reduction of four percentage points expected to lower the cost of the existing obligation, though actual savings will depend on the outstanding balance, repayment schedule and other terms.
The fresh N100 billion loan will also attract 22 per cent interest, subject to review in line with prevailing money market conditions. It has a repayment tenor of 48 months, with a management fee of 0.25 per cent per annum and an advisory fee of 0.5 per cent annually, both calculated on the outstanding balance.
A three month moratorium on principal and interest repayment is also provided, with interest accruing during that period repaid alongside the fourth, fifth and sixth instalments.
During deliberations, Deputy Speaker Muhammad Abiodun Fadeyi joined lawmakers Adebayo Babajide Gabriel, Olorunpoto Cephas Rahman and Sunkanmi Babalola in defending continued infrastructure investment as necessary for economic growth and improved public service delivery.
The lawmakers cited the LAUTECH Teaching Hospital in Oyo town, the Rashidi Ladoja Circular Road and the Ido Eruwa Road among projects whose timely completion, they argued, would deliver wider economic benefits by improving connectivity, creating jobs, stimulating commercial activity and easing the movement of people and goods.
They stressed that infrastructure development should be assessed not only by funds committed but by practical benefits delivered to communities, businesses and users of public facilities, and warned against leaving projects unfinished despite substantial public expenditure.
The approval gives the Makinde administration legislative backing to proceed with both arrangements. While the N100 billion loan creates a new borrowing obligation, the N300 billion refinancing restructures an existing facility rather than automatically adding the same amount to the state’s fresh debt.
The development comes as the administration’s tenure winds down, placing renewed emphasis on the implementation of the projects for which the new funds are intended and on the government’s ability to meet repayment obligations while sustaining spending on other public services well beyond May 2027.
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