A review of the Osun State Q1 2025 budget performance report has shown that a sum of N6.1billion was spent on debt servicing.
The first quarter (Q1) represents the months of January, February, and March.
In the same period, N18.3 billion was recorded as internally generated revenue (IGR) by the state government.
This means that 33.3% of the state’s internally generated revenue was spent on debt servicing in the first quarter of the year.
In another context, for every N10 made in Q1 2025, the Osun State government spent N3.33 on debt servicing.
The amount spent on debt servicing (N6.1 billion) is more than the N210.5 million spent on capital expenditure by the Ministry of Water Resources.
It is also more than the N485 million spent by the Ministry of Rural Affairs and Community Development.
More was spent on debt servicing than on the capital needs of the Ministry of Education.
The ministry’s capital expenditure stood at N3.4 billion in Q1 2025, falling short of the N6.1 billion spent on debt servicing in the same period.
Only N1.717 billion was spent on capital expenditure for the Ministry of Health in the first quarter of 2025.
According to details in its published budget performance documents, in 2024, the Osun State government spent N22.4 billion on debt servicing.
This means that between January 2024 and March 2025, a total of N28.5 billion (N6.1 billion for Q1 2025 and N22.4 billion for full-year 2024) has been spent on debt servicing.
According to the document, the expenditure on debt servicing for full-year 2024 (N22.4 billion) represents over 50% of what the state recorded as internally generated revenue.
The state recorded N40.5 billion in IGR in 2024.
This implies that 54.3% of the state’s internally generated revenue was spent on debt servicing between January and December 2024.
Whilst spending N22.4 billion on debt servicing, the state spent less on critical infrastructure.
Capital expenditure for the Ministry of Agriculture stood at N3 billion, and only N48 million was spent by the Ministry of Transport on capital projects.
While debt servicing gulped N22.4 billion in 2024, the state spent N59 billion on the Ministry of Works.
This means that Osun State spent 37.2% of what it spent on the Ministry of Works on debt servicing.
Debt servicing is said to have a significant impact on the ability of states to meet the developmental needs of their citizens. It also raises issues around transparency and accountability in the management of public funds.
There have been growing concerns about states’ reliance on loans to meet fiscal needs — a trend that often results in high debt servicing burdens.
Source: Sahara Reporters
