Oyo state is in a financial mess. No thanks to the mind blowing #150billion loan borrowed within the space of two years by the administration of Governor Seyi Makinde. Given the way GSM promised to lift Oyo out of the inescapable underbelly of federal monthly allocation during electioneering campaign and the sad turn of things, one is bound to ask how rational this lust for loan by the state government reached this peak. Or is the Governor’s professional orientation influencing his decision making process in politics and policy matters?
The basic engineering textbook says an engineer is a person trained and skilled in the design, construction, and use of engines or machines. An engineer is trained to be practical, and realistic. He is also expected to exhibit some touch of perfectionism. Or stuffs designed with engines or machines will crumble and wreck a devastating havoc on people’s lives and properties. Take Automobile, telecommunications skyscrapers, flyover bridges among others; all without exceptions are engineering and architectural masterpieces. Without obsession with perfection, we might not have Burj Al Arab, (tallest building in the world) Eiffel Towers, Great wall of China, Christ the Redeemer statue in Brazil, even our Cocoa house in Ibadan (which holds the seat of African tallest building for years) and other magnificent buildings doting the world landscapes. But engineering has limits: perfection can never be attained.
This helps explain why nerve wrecking borrowing by this administration continue to raise hot and windy dust in the public space. Radio and road side economists are quick to point to the essence of borrowing. They are also quick to say loan is a must for development to take place. And when you raise the question of scanty project to plenty loan or the sustainable nature of the loan itself, then you watch as they wander from stuttering to dizzying silence. “It is not the loan that matters” they often say albeit ignorantly “ what matters is the what it is used for”. This line is so spellbound as it is catchy that it is used to hoodwink innocent civilians caught in the crossfire of partisan politics. Road side economists are right and wrong at the same time. You borrow loan to fund project. Fine. You ask for help when in need. Sure. You also touch more lives with loan than monthly allocation and internally generated revenue could handle. In a sense, judicious use of loan has a multiplier effects on the lives of citizens than the combined IGR and Fed handout. And that is where road side economists got it right.
But in a peculiar state as Oyo, excessive borrowing is a time bomb. Plus when such loan defies logic and a sustainability measure. That is when you realize there is fire waiting to turn inferno on the mountain. On the sustainable measure of excessive loan, radio and TV economists got it wrong. “Our economy cannot develop if we do not have enough funds to develop necessary infrastructures” Adebo Ogundoyin, state Assembly speaker said when asked to comment on the 100billion Oyo Prosperity Bond in 2020 “and we have the assurance of the Executive council that the burden of the loan will not be borne by the next administration as all efforts will be made to pay them back in short terms”.
Economics imagines a world of irrepressible dynamism, Abhijit V. Baberjee and Esther Duflo quixotically declared in their book Good Economics for hard times, “people get inspired, change jobs, turn from making machines to making music, quit and decide to wander the world. New businesses get born, rise, fail, and die, are replaced by timelier and more brilliant ideas. Productivity grows in staccato leaps, nations grow richer”. At the forefront of this irrepressible dynamism are economists, experts who study the reasoning behind decisions people make and is interested in using data to boost profits, create better public policy or conduct research. In other words, an economist is trained and skilled in people’s decision making process. While an engineer is concern with machines and engines, economist primary responsibility is human and their decision.
In predictably Irrational, Dan Ariely says the very basic idea, called rationality, provides the foundation for economic theories, predictions, and recommendations. While engineering for instance is premised on practicality, economics conversely is predicated on rationality. But Ariely observed that human being are not only irrational but predictably irrational – that our irrationality happens the same way, again and again. Whether as consumers, businesspeople, policy makers and government officials. He said it is important we understand how we are predictably irrational and how we can improve our decision making and change the way live and possibly the way we lead.
This point when pressed deeply reveal one pattern: this administration obsession with loan. Rather than provide rational arguments in support of the state’s government borrowing spree, sponsored commentators and political bootlickers continue to rationalize, and justify it. As any political discourse over the years have shown, attempts have been made to muddled the conversation and give it a semblance of ‘we versus they’ intellectual combat has surfaced. There is no point in rationalizing this irrational borrowing spree again.
As the state continue to incur more loan, the future generation is now being dragged into the mess being created now. While there are pockets of project across the state showing the loans are being channeled to improve people’s welfare and well-being, I think there is a need for this Government to rethink its approach to the state’s sustainable development, financial status, prosperity and of course its future.
OYO101, Muftau Gbadegesin’s opinion on issues affecting Oyo State, is published on Saturdays. He can be reached via muftaugbadegesin@gmail.com and 09065176850.
