By Isaac Olufemi Ojo
The Oyo State House of Assembly has granted approval to Governor Seyi Makinde’s request to issue a ₦200 billion Infrastructure Bond aimed at refinancing existing short-term loans.
The move is designed to restructure the state’s debt profile, lower interest costs, and secure the sustainability of ongoing critical infrastructure projects.
The approval followed the consideration of a formal request transmitted by the Governor to the legislature, which was read during plenary by the Speaker, Rt. Hon. Adebo Ogundoyin.
In his communication to the House, Governor Makinde explained that the initiative is part of a broader strategy to bolster the state’s fiscal health, ensure economic growth, and improve public service delivery.
According to the executive communication, the state is currently burdened by high-interest short-term obligations—including commercial bank loans, contractor-financing arrangements, overdrafts, Treasury Single Account advances, and Federal Government intervention facilities.
These instruments currently carry weighted average interest rates ranging from 22 to 26 percent per annum, creating significant pressure on the state’s finances.
The proposed bond, by contrast, is expected to attract a fixed interest rate of between 17 and 19 percent, with a one-off issuance fee capped at 2.35 percent.
The government projects that this refinancing strategy will yield annual interest savings of between ₦10 billion and ₦14 billion, freeing up fiscal space to further fund healthcare, education, and other priority sectors.
During the debate on the request, lawmakers unanimously threw their weight behind the proposal, describing it as a prudent financial maneuver to safeguard the state’s long-term economic future.
The Majority Leader of the House, Hon. Sanjo Adedoyin, and the Chief Whip, Hon. Gbenga Oyekola, commended the Makinde-led administration for its aggressive infrastructure drive.
They noted that citizens are already witnessing the tangible benefits of government investments across various sectors, including aviation, road networks, education, urban renewal, and healthcare.
Some of the legacy projects supported by the existing facilities include the Senator Rashidi Ladoja Circular Road, the Ogbomoso-Iseyin Road, the upgrade of the Samuel Ladoke Akintola International Airport, the Light-Up Oyo project, and the reconstruction of the Ojoo-Akinyele Interchange corridor.
The lawmakers expressed confidence that the transition to long-term bond financing would consolidate these gains and ensure that the administration’s development agenda remains on a sustainable path.
