Osun APC accuses Adeleke of plan to use LGs as collateral for N300bn loan

By Deborah Oladejo, Osogbo –

The All Progressives Congress (APC) in Osun State has alleged that the administration of Governor Ademola Adeleke is planning to obtain a N300 billion loan using the state’s 30 local government councils as collateral.

The allegation was contained in a statement issued on Tuesday by the Osun APC chairman, Tajudeen Lawal, who described the alleged plan as illegal and warned the management of Unity Bank Plc to be cautious of any arrangement involving the councils, maintaining that states do not have authority over local governments to engage in such deals.

Lawal claimed that the governor and members of his cabinet on Monday invited the Peoples Democratic Party (PDP) local government chairmen, heads of local government administration, directors of administration and heads of finance from the 30 councils and the area office to a meeting at the State Secretariat in Abere, where the alleged borrowing plan was disclosed.

According to him, at the meeting each of the councils was expected to serve as collateral for the proposed loan, which he said amounts to about N10 billion per local government, alleging that the state government promised to handsomely take care of senior cooperative career officers in the councils.

The APC chairman stated that there is no justifiable reason for the Adeleke-led government to plunge the state into avoidable debt that future generations would be liable to repay.

He also argued that the alleged move contradicts the principle of local government autonomy, which he said had been affirmed by the Supreme Court, noting that the Court of Appeal had reinstated APC local government chairmen in the state.

“It should also resonate in the memory of the management of Unity Bank Plc that the recognised council executives in Osun State today are the Court of Appeal-reinstated APC local government council chairmen who have been carrying out their statutory duties diligently for the past one year. It is necessary to warn the management of Unity Bank Plc that any contract entered into by them with the illegal council chairmen is a nullity, as the reinstated APC chairmen are the only ones known to the law of the land.”

Lawal therefore called on stakeholders in the state to intervene and stop what he described as an unpatriotic move capable of plunging Osun into avoidable debt, adding that the alleged borrowing plan would contravene the provisions of the Debt Management Office Act, 2003, which requires the approval of the Federal Minister of Finance, the Accountant-General of the Federation and the executive councils of the local governments before such borrowing can take place.