Oyo Assembly Backs Makinde’s N100bn Loan, N300bn Debt Refinancing -

The Oyo State House of Assembly has approved Governor Seyi Makinde’s request for a N100 billion loan from United Bank for Africa (UBA) Plc to fund infrastructure projects, alongside a separate N300 billion facility to refinance an existing contractors’ loan obtained from Access Bank.

The approval followed a letter from Governor Makinde, addressed to the Speaker, Rt. Hon. Adebo Ogundoyin, and read during plenary.

Under the arrangement, the N100 billion loan will finance critical infrastructure projects and accelerate the completion of ongoing projects across the state, while the N300 billion facility will be used to transfer the government’s existing contractors’ finance obligations from Access Bank to UBA.

The Assembly was informed that the refinancing arrangement would reduce the interest rate on the existing facility from 26 per cent to 22 per cent, representing a four-percentage-point reduction.

However, the new N100 billion loan will also attract an interest rate of 22 per cent, subject to review in line with prevailing money market conditions.

The facility has a repayment period 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.

The terms also provide for a three-month moratorium on principal and interest repayments, with interest accruing during the period to be repaid alongside the fourth, fifth and sixth loan instalments.

Contributing to the debate, the Deputy Speaker, Hon. Muhammad Abiodun Fadeyi, and other lawmakers, including Hon. Adebayo Babajide Gabriel, Hon. Olorunpoto Cephas Rahman and Hon. Sunkanmi Babalola, defended sustained infrastructure investment as necessary for economic growth and improved public services.

They cited projects such as the LAUTECH Teaching Hospital in Oyo town, the Rashidi Ladoja Circular Road and the Ido-Eruwa Road, arguing that their timely completion would improve connectivity, create jobs and stimulate commercial activities.

The lawmakers also stressed the need to ensure that funds already committed to ongoing projects translate into tangible benefits for residents.

With the approval, the Makinde administration is expected to access additional funding for infrastructure development while refinancing its existing contractors’ finance facility at a lower interest rate.

The arrangement, however, means the state will take on a new N100 billion borrowing obligation while restructuring the existing N300 billion facility under the agreed terms.