The Oyo State House of Assembly has approved a fresh ₦100 billion loan facility for Governor Seyi Makinde’s administration to accelerate infrastructure projects and support other development initiatives across the state.
The approval followed a request submitted by Makinde in a letter addressed to the Speaker of the Assembly, Adebo Ogundoyin, and presented during plenary on Wednesday, October 21, 2026.
The new facility, to be obtained from United Bank for Africa (UBA) Plc, is intended to provide additional funding for critical infrastructure and help the government complete projects already under construction.
Alongside the fresh borrowing, lawmakers also approved a separate ₦300 billion refinancing arrangement designed to transfer the state government’s existing contractors’ finance facility from Access Bank to UBA.
Although the two facilities have a combined value of ₦400 billion, the refinancing component is not equivalent to an additional ₦300 billion in fresh borrowing because it is intended to restructure an existing financial obligation.
According to reports on the Assembly’s decision, the existing contractors’ facility carries an interest rate of 26 per cent, while the proposed refinancing arrangement with UBA would reduce the rate to 22 per cent.
The four-percentage-point reduction is expected to lower the interest burden attached to the existing facility, although the actual savings will depend on the outstanding balance and the applicable repayment terms.
The separate ₦100 billion loan will also carry an interest rate of 22 per cent, subject to review in line with prevailing money market conditions, and will have a repayment period of 48 months.
Its terms include 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 financing arrangement also provides for a three-month moratorium on repayments of principal and interest, but interest accrued during that period will still have to be paid alongside the fourth, fifth and sixth instalments.
These conditions mean that the overall cost of the new borrowing will extend beyond the principal amount, with interest charges, applicable fees and the repayment schedule all affecting the state’s eventual financial obligations.
During deliberations, Deputy Speaker Muhammad Abiodun Fadeyi and other lawmakers defended continued investment in infrastructure, arguing that completing ongoing projects would support economic growth and improve public service delivery.
The lawmakers cited the Ladoke Akintola University of Technology Teaching Hospital in Oyo town, the Rashidi Ladoja Circular Road and the Ido-Eruwa Road among projects whose completion could provide benefits to residents and businesses.
They argued that sustained infrastructure investment could improve transportation links, create employment opportunities, stimulate commercial activities and make it easier for people and goods to move across the state.
The lawmakers also stressed that completing projects already underway would help ensure that public funds previously committed to construction translate into practical benefits rather than leaving development initiatives unfinished.
The projects referenced during the debate span different areas of public infrastructure, including healthcare facilities and road construction, highlighting the range of developments the state government is seeking to advance.
With the Assembly’s approval, the Makinde administration has obtained legislative backing for the proposed financing arrangements, which are intended to support infrastructure delivery while restructuring existing contractors’ financing obligations.
However, the financial implications of the decision differ between the two facilities, as the fresh ₦100 billion loan creates a new borrowing obligation while the ₦300 billion arrangement is designed to refinance an existing debt at a lower interest rate.
The reduction in the refinancing rate could ease some pressure on the state’s finances, but the overall benefit will depend on the outstanding amount, repayment terms and the final conditions governing the transaction.
Similarly, the new loan’s interest rate, fees, repayment period and provisions for accrued interest will determine how much the state ultimately pays for the additional funds.
The development therefore places importance not only on the government’s ability to complete its infrastructure programme but also on transparent spending, project delivery and responsible management of public debt.
Residents will ultimately assess the impact of the financing through the progress of the projects, the quality of completed infrastructure and the benefits delivered to communities across Oyo State.