AS a matter of fact, the Oyinlola-led administration's decision to take the term loan on the verge of its illegal second term in office is tantamount to financial recklessness with questionable intentions.
For posterity sake, why should a government whose illegal tenure is less than 12 months obtain N18.3billion term loan of three years tenor? Anyway, PDP's regime in the state was characterised by its lack-lustre attitude and cluelessness in governance.
In addition, the claim of expectation of over N2billion reimbursements from some capital projects, and refund of excess interest charges on some offshore facility, which he said were meant to cater for part liquidation of the term loan is funny and ridiculous. How on earth can any serious government base its expectation on extraordinary revenues?
Moreover, one wonders if the structure of the referenced term loan took into cognisance those expected receivables as sources of repayment.
As customary of PDP administration's manner of financial squander in the state, the receivables would have also gone down the drain in usual style, had it been they came before the Oyinlola-led government was disgraced out of office. Afterall, the state also frittered away the bulk of excess crude oil revenue earned during PDP regime.
It is very important to let the world know that although the state plans to access money from the capital market, it has not taken any amount yet. As a matter of fact, his comment on the bond programme revealed knowledge gap about the dynamics of capital market. We are only accessing N30 billion.
Although, we are planning for future needs of the state and anticipating increase in revenues by creating a future shelf or room of N60billion. The approval we are processing is for N30 billion and that's what the state's revenues can carry for now.
It is a disciplined process and approvals are not granted recklessly. One, therefore, wonders where he got the information that the state has issued N60 billion, 10 year bond at 15 per cent per annum.
This is a frivolous allegation similar to the N25billion loan he alleged Governor Aregbesola has taken to help his fuzzy maths. Osun's only loan is N8.6 billion and it was used to offset the unreasonable loan Oyinlola took on crazy terms, period!
For your enlightenment, bond issuance programme is a rigorous and transparent exercise which requires a lot of documentation and scrutiny by various regulatory authorities such as Securities and Exchange Commission, SEC, Debt Management Office, DMO and Nigerian Stock Exchange, NSE, among others. The various advantages of bond over bank facility and our administration's transparency are, of course, the impetus for the proposed capital market borrowing.
It is cheaper on the long run, interest rate is fixed and certain, and there is no exchange rate risk.
The promissory note facility mentioned in the publication is meant for spontaneous financing.
This enables contractors to move to site without being mobilised based on negotiable instruments (promissory notes) issued to them by the state. This is possible based on the ingenuity and credibility of the current administration under the leadership of Ogbeni Rauf Aregbesola.
I think we should ask if the Oyinlola-led administration in the state had such level of initiative, integrity and enviable credit rating to attract such confidence and trust of contractors and investors. Records of unpaid contractors' liabilities our administration inherited when we came on board exist for verification.
In summary, we will like our detractors to provide answers to questions to further justify their intentions on the referenced term loan.
•Mr. WALE BOLORUNDURO is the Commissioner for Finance, Economic Planning and Budget in Osun State.
Vanguard Nigeria