Gbolarumi Questions Makinde’s ₦100bn Loan as Oyo Assembly Defends Borrowing Plan

A governorship aspirant in Oyo State, Hazeem Gbolarumi, has criticised Governor Seyi Makinde over the state government’s proposed ₦100 billion loan, raising concerns about the financial obligations that could be left for the next administration.

Gbolarumi, a former deputy governor of the state, expressed his concerns in a statement reportedly issued through his media office on Saturday, October 24, amid debate over the Oyo State House of Assembly’s approval of new borrowing and a separate debt refinancing arrangement.

The Assembly approved the ₦100 billion facility from United Bank for Africa (UBA) Plc on October 21, following a request from Makinde. The proposed loan is intended to support ongoing infrastructure projects and other development initiatives across the state’s 33 local government areas.

A separate ₦300 billion facility was also approved to refinance an existing contractors’ finance arrangement obtained from Access Bank.

The two arrangements have a combined value of ₦400 billion, but they serve different purposes. The ₦100 billion facility represents proposed fresh borrowing, while the ₦300 billion arrangement is intended to restructure an existing obligation rather than automatically add another ₦300 billion to the state’s debt.

During deliberations, lawmakers said the refinancing would reduce the interest rate on the existing contractors’ facility from 26 per cent to 22 per cent. They also said the new ₦100 billion loan would carry an interest rate of 22 per cent, subject to review in line with prevailing money market conditions, with a repayment period of 48 months.

The terms reported for the new loan include a management fee of 0.25 per cent annually and an advisory fee of 0.5 per cent annually, both calculated on the outstanding balance. A three-month repayment moratorium is also provided for, although interest accruing during that period would still be payable.

The Assembly defended the borrowing plan on the grounds that it would help the government complete ongoing projects and sustain infrastructure development. Lawmakers cited projects including the Rashidi Ladoja Circular Road, the Ido-Eruwa Road and the Ladoke Akintola University of Technology Teaching Hospital in Oyo town.

The debate comes as Oyo State prepares for a change of administration in 2027, making the purpose, cost and repayment of public borrowing important issues for scrutiny.

The Debt Management Office’s figures show that Oyo State had domestic debt of approximately ₦66.40 billion as of June 30, 2026. The figure predates the Assembly’s approval of the new loan and should not be treated as a statement of the state’s current total debt, which would require updated domestic and external debt figures.

The outstanding questions include how much of the approved facility the government intends to draw, the total cost over the repayment period, the projects to receive funding and how repayment obligations will affect future budgets.

The approval of the facilities does not, by itself, establish that the government has borrowed or received the entire amount. Nor does the stated purpose of infrastructure development establish that the funds will produce the intended results.

A full assessment of the arrangement will depend on the final loan agreements, the amount disbursed, the projects funded and the state’s capacity to meet repayments without undermining other public services.