By Amofin Beulah Adeoye
When the future beckons, Oyo State must answer. The path to industrialization lies not in hesitation, but in strategic leverage – an opportunity to harness the capital needed to fuel growth and unlock untapped potential. The time has come for Oyo State to embrace debt as a tool for development, to leverage our resources, and to invest in the infrastructure and industries that will elevate our state to new heights.
But let us pause, breathe, and consider: debt paradoxically can be the vessel of hope, when wielded with discipline and forward-looking intent. Singapore and Rwanda, despite disparate sizes and histories, share this dynamic truth: debt, deployed strategically, can become the scaffold of industrial dreams.
For Oyo State, standing at the cusp of a new development frontier, their stories offer both light and guidance.
1. Singapore’s Ingenious Architecture of Debt and Development
A glance at Singapore’s gross debt-to‑GDP ratio – nearly 170%, feels rather alarming. Yet beneath that statistic lies a remarkably resilient structure of public finance. The city-state does not borrow to cover day-to-day government consumption. Indeed, its constitution virtually forbids borrowing for recurrent spending and it almost always runs budget surpluses. Mostly with no net debt position and its assets consistently outstrip these liabilities.
Rather, Singapore issues various types of bonds, each with a precise role:
SGS (Singapore Government Securities): Marketable instruments designed to build a liquid domestic bond market and benchmark for corporate financing.
SSGS (Special SGS): Non-marketable bonds issued to manage the Central Provident Fund (CPF), Singapore’s compulsory savings scheme for housing, healthcare, and retirement.
SINGA Act debt – “Infrastructure bonds”: Introduced in 2021, allowing borrowing up to S$90 billion for nationally significant infrastructure projects—spreading large costs across decades and generations.
Such instruments serve dual purposes: they capture excess liquidity, deepen the capital market, and safeguard the CPF, while channeling funds into projects like MRT lines, tidal walls, and Changi Airport
Underlying this is a fortress of fiscal discipline: debt proceeds are not spent corruptly, but are reinvested via sovereign wealth vehicles like GIC and Temasek, which then generate returns that fund government budgets.
All considered, Singapore holds a net asset-positive balance sheet: its assets notably exceed its liabilities. This is also precisely where Oyo state can take the first learning that high gross debt is not necessarily dangerous when matched by strong assets, stringent fiscal rules, and a disciplined framework for borrowing. Singapore’s model shows that when borrowing is ring-fenced for long-term assets, and when the returns are wisely managed, public debt transforms from a liability into an opportunity.
2. Rwanda’s Path: Borrowing with Purpose and Prudence
Rwanda’s narrative is different in tone but similar in intent: emerging from total collapse in 1994, its leaders had to rebuild with both urgency and foresight. Strategically targeted infrastructure, industrial revitalization, and structural reforms took center stage amid limited resources. Post-genocide, Rwanda’s GDP rebounded with 13% growth by 1996—fueled by reforms in tax collection, privatization, and investment promotion. It deployed concessional loans to build energy, road, and human capital infrastructure, emphasizing high-yield, inclusive sectors. The Development Bank of Rwanda (BRD) emerged as the long-term financier, supporting agro-industry, SMEs, and rural development with accessible loans.
Crucially, Rwanda sought debt relief early on, $1.2 billion under the MDRI, plus $1.8 billion more, to ease its fiscal burden. Since then, debt-to-GDP ratios have fallen from above 100% in 1995 to around 64% in 2022, helping stabilize the economy.
In the current fiscal year, Rwanda plans a 21% expansion in spending—especially on airport facilities, agriculture, electrification, and social services, with 31% financed through external loans, balanced by 58% domestic revenue and 8% grants. Rwanda’s economy continues to grow, estimated at 7.1% in 2025 and 7.5% in 2026.
Rwanda’s playbook: borrow only for high-impact, growth-generating investments, pair it with structural strengthening, and ensure sustainability by lowering debt ratios over time. The result is meaningful industrial expansion and poverty reduction, from over 60% in 2000 to around 27% today.
Drawing the parallels between Singapore, Rwanda and Oyo State ( a sub-sovereign), this is not a call for reckless borrowing, but sensitisation that smart leveraging, using the available capital to bridge the funding gap and fund vital projects that will bring economic prosperity to the state is not a choice, but a sacred call to duty by prudent leadership- it is an imperative. Unlike increasing taxes, which place an immediate burden on citizens, leveraging debt allows the state to invest in its future, ensuring that economic growth today will offset future liabilities.
One may ask, why must we leverage now and what is the urgency of debt financing in Oyo State? Well, the numbers tell the entire story.
Oyo State in spite of the spirited award-wining and masterful navigation of the current administration, still faces an infrastructure deficit that if not addressed could stifle growth. Our roads are inadequate, energy supply is unreliable, and industrial hubs are still in their infancy. Small-scale farmers lack access to the tools and facilities needed to scale, while youth unemployment threatens to spiral out of control. Without substantial funding, these challenges will remain, hindering the state’s potential to achieve industrialization.
The deficit in Oyo’s infrastructure needs is clear: the transportation network remains fragmented, energy costs are high, and industrial zones are underdeveloped. Without the capital to invest in roads, power generation, and agro-industrial hubs, the state’s growth will be hampered. Current infrastructural investments will be heavily burdened, strained and their impact may be reversed. And when we consider the demand for skills in modern industries, it becomes even clearer that investing in vocational and technical education is crucial. These are the critical sectors that will form the backbone of Oyo’s industrial future. Accordingly, the problem statement is clear. We need to invest more and we need funds for this.
But one may ask the question, where will the funds come from? The state government has made strides in infrastructure, education, and health, but it is clear that external capital, through leveraging debt, is the only viable solution to bridge the gap and enable large-scale transformation at this point. The question is no longer whether we should borrow, but how we can leverage wisely, and where we need to focus these funds.
If we continue to leverage for long-term assets that generate future cashflow and spur sustainable development as intended, rather than short-term consumption – Like Singapore and Rwanda, Oyo State can use debt strategically to power the future.
These are funds deployed, not for consumption, but for long-term infrastructure investments that will build the foundation for sustainable growth. When debt is used in this manner, it is a catalyst for development—fueling the kind of high-return investments that will power industries and bring jobs, opportunities, and prosperity.
We have already seen how Oyo State leveraged capital to build roads that connect rural agricultural zones to manufacturing hubs, invested in solar-powered mini-grids to fuel industrial parks, and developed the human capital needed to staff these industries. By borrowing wisely, Oyo can increase the infrastructure needed to support the factories, processing plants, and logistics hubs that will drive economic activity for years to come.
The promise in this round of leverage and what we need the funds for are clear. Let’s explore at a more granular level where more money will need to go as Oyo State is transitioning from an agricultural-based economy to a thriving industrial powerhouse:
1. Infrastructure: Roads, Bridges, and Logistics Hubs. Oyo State’s roads and transport systems need an upgrade. Our agricultural products need reliable routes to market, while factories and industries need efficient transportation links. Borrowing now will allow for the construction of key roads, bridges, and logistics hubs that will facilitate trade and reduce the costs of doing business. What this will do is to improve market access for farmers, lower transport costs for manufacturers, and unlock regional trade and tourism.
2. Energy: Powering Industries
Oyo’s current energy supply is insufficient for industrial activities. By leveraging debt, we can fund solar-powered mini-grids, as well as hybrid power plants that serve industrial zones, factories, and communities. With the global energy transition in mind, investing in renewable energy now will ensure sustainable growth. What this will do is to power industries, reduce energy costs, and promote green manufacturing.
3. Industrial Zones and Agro-Processing Hubs
Oyo must invest in the establishment of industrial zones and agro-processing hubs. How will the plans for Ijaiye, Igbo Ora, Ipapo and the others take off without adequate funding? These transformative agro-industrial hubs will enable value-added processing of local raw materials, creating jobs, increasing export opportunities, and driving economic diversification. Leveraging capital for the creation of these hubs will give the state a much-needed edge in global markets. The tempo has been created, the global agreements signed and the funding must follow. What this will do is to create jobs, add value to raw materials, and diversify the state’s economy.
4. Skills and Education: Building the Workforce of the Future. To fuel industrialization, Oyo needs continuous investment in an educated and skilled workforce. The state must increasingly invest in vocational training institutes and technical schools to equip young people with the skills needed for manufacturing, engineering, and technology sectors. What this will do is to raise the quality of Oyo’s workforce, reduce unemployment, and provide businesses with the skilled labor they require.
5. Healthcare: The Backbone of Productivity
Oyo must also continue to prioritize healthcare investments, ensuring that industrial workers, families, and communities remain healthy and productive. Health infrastructure—hospitals, clinics, and healthcare centers—must be expanded and modernized. What this will do is to improve public health, boost workforce productivity, and reduce absenteeism.
If we may then shift gears to consider whether leverage is in fact better than increased taxation? Well, Whilst the state government could attempt to raise funds through increased taxation, this would place an immediate burden on citizens and businesses, potentially stalling the economic growth we are trying to ignite. Leverage – strategic borrowing, avoids that trap. By borrowing to finance long-term investments, there is a slant to equity and justice in the theoretical framework underlying public borrowing. Strictly speaking, Oyo State can thus spread the cost of today’s infrastructure over generations of future beneficiaries. The returns on investment from these projects, such as new factories, improved roads, and reliable power will ensure that the state’s economy grows enough to meet its obligations. Accordingly, the present and future generations can benefit equally.
In fact, smart leveraging—investing in infrastructure, education, and industries now—creates the conditions for higher tax revenue in the future, as the economy expands and new businesses emerge. I would therefore like to end this piece with some reflections on actionable steps for Oyo State citizens to support this vision of a prosperous future:
Engage in Dialogue: Actively participate in discussions around the state’s debt strategy, ensuring transparency and accountability.
Support Strategic Investments: Advocate for the prioritization of infrastructure and education investments as key drivers of Oyo’s future.
Be Patient with Taxation: Understand that a temporary increase in borrowing now can lead to reduced tax burdens in the future as the economy grows.
Promote Local Manufacturing: Support local industries and businesses that will benefit from improved infrastructure and energy.
Join Training Programs: Enroll in vocational and technical training programs that align with Oyo’s industrial development goals.
Invest in Innovation: Support local entrepreneurs and small businesses by investing in innovation hubs and technological development.
Encourage Civic Engagement: Stay informed about state spending and debt management to ensure funds are used for their intended purpose.
Promote Green Energy: Advocate for sustainable energy solutions, such as solar mini-grids, that will power industrial zones and create jobs.
Prepare for Industrial Jobs: Equip yourself with skills that are in high demand in manufacturing, logistics, and agro-processing sectors.
Trust the Plan: Believe in the state’s long-term vision for industrialization and commit to working together to bring it to fruition.
In conclusion, it is as simple as stating that we must leverage today, in order to prosper tomorrow. Oyo State stands at the brink of a transformative journey. The opportunity to leverage capital for infrastructure and industrialization is now. By borrowing strategically, we can build the foundation for an industrial economy, generate jobs, and create sustainable growth for future generations.
In the hands of bold, disciplined and laser focused leadership, such as the proven track record over the last six years, under the leadership of His Excellency Governor Seyi Makinde supported by my dear brothers Akinola Ojo, (the Honourable Commissioner for Finance) and Professor Musbau Babatunde (the Honourable Commissioner for Budget and Planning), public debt in Oyo State is not a trap – it is a necessary tool for present and future prosperity, and their antecedents prove it. The promises made to the citizens have been kept consistently and evidence shared publicly and verifiably – with over half a decade of quiet consistency to back it up.
At this juncture, it is equally important to balance the argument and acknowledge Oyo State’s actual borrowing trajectory and ongoing efforts to broaden its financing toolkit. As of the end of 2021, the state’s total public debt stood at approximately ₦178 billion, comprised of ₦142.6 billion in domestic obligations and $85.3 million (≈₦35.5 billion) in foreign debt. By September 2024, borrowing had increased further, with debt servicing totaling ₦20 billion in just nine months—nearly 44 % of internally generated revenue (IGR) which had rapidly been improved during that period as well
Yet alongside borrowing, Oyo State has made notable strides in non‑debt financing. Its IGR rose impressively to ₦65.28 billion in 2024, marking a 145.5 % increase since 2019 and placing Oyo among Nigeria’s top ten IGR‑earning states. Budget performance metrics also improved significantly, revenue execution climbed to 91 % in 2024, up from 57.4 % in 2019, reflecting stronger fiscal discipline.
These figures reveal the dual narrative that whilst borrowing remains necessary, Oyo is concurrently enhancing its fiscal architecture, expanding revenue capacity, and positioning itself for more resilient, diversified development.
Institutional frameworks for transparency and accountability have also been established, like the Due Process Office ably led by my dear Sister Tara Adefope whose broad experience in Law, Banking and International Finance has been invaluable in Project Monitoring and creating structures for Project Delivery amongst others in the government. These key leaders and organs ensure that there are measurable outcomes for public borrowing and project execution as Oyo state is after all a sub-national that is also subject to the fluctuations in macroeconomic indices over which it has no control such as forex, national debt levels and interest rates amongst others.
And whilst the strategic use of debt as a tool for development is imperative, it is also vital to emphasize in the same breath that borrowing is not without risk. Oyo State must proceed with clear-eyed realism. Public debt, if poorly managed, can become a burden, crowding out essential services, increasing debt servicing costs, and constraining future budgets. Therefore, strong functioning of the institutional frameworks already set up by His Excellency Seyi Makinde must accompany any borrowing strategy. Every naira borrowed must be tied to measurable outcomes, managed transparently, and deployed with discipline.
Moreover, debt must not replace necessary reforms in governance, public financial management, and internally generated revenue. Citizens deserve transparency and accountability in how funds are used, and should be included in oversight through open budgeting and civic monitoring platforms.
Singapore and Rwanda offer inspiration, but Oyo’s path must reflect its own fiscal realities, legal limits, and socio-political context. Strategic borrowing must continue to be just one part of a larger and diversified financing strategy that includes public-private partnerships, improved tax efficiency, and innovative instruments.
Debt is not destiny. It is a tool. And like any tool, its value lies in how responsibly and effectively it is wielded, otherwise it could cause grievous harm and even fatalities. The commitment, therefore, is not just to borrow—but to borrow wisely, execute faithfully, and grow sustainably.
Oyo State must not shy away from leveraging this opportunity. We must turn this moment of leveraging into a future of lasting growth. Perhaps the best time to leverage was the day before yesterday – when the rates hovered in the region of single digits, but the next best time is now – and we must seize the moment where the stars align for us to access the finance to create a prosperous future for us and our children.
