The Executive Governor of Ogun state, Prince Dapo Abiodun has said that the state will soon become an oil-producing state.
Punch reports that the state would soon be given frontier status and would join the league of oil-producing states in the country.
Prince Abiodun said this while presenting the 2024 Appropriation Bill called the Budget of Sustained Growth and Development at the Ogun State House of Assembly.
He mentioned that because Ogun State was going to start producing oil, his government had set up the Ministry of Mineral Resources. This ministry’s job is to manage and control all the natural resources in the state.
Additionally, he explained that they also created the Ministry of Energy. This move was to make the most of a change in the constitution that lets state governments get involved in the energy sector.
- “Discussions are ongoing regarding the exploration of oil in Tongeji Island, Ipokia Local Government Area, and Olokola, in Ogun Water-Side Local Government Area, respectively. We are confident that very soon, we will be given frontier status and will soon join the league of oil-producing states.”
Nigeria’s current oil-producing states are Abia, Akwa Ibom, Anambra, Bayelsa, Delta, Edo, Imo, Ondo, and Rivers. Although revenues from the oil sector increased by 44.2% in the first half of 2023, the debt profile of these states has increased significantly.
Research by Nairalytics, the research arm of Nairametrics, revealed that in the first half of 2023, these nine oil-producing states in Nigeria received a whopping sum of N544.9 billion as part of the 13% oil derivatives share from the federal government in the first half of 2023, a 44.2% increase compared to N377.9 billion received in the corresponding period of 2022.
But even with this extra money, these states ended up with much more debt. Their collective debt went up by N465.4 billion in just six months.
Nairalytics stated further that data from the Debt Management Office (DMO) showed that the nine states saw their total debt stock increase from N1.86 trillion recorded as of December 2022 to N2.33 trillion as of the end of June 2023, largely due to the revaluation of their external debt as well as the acquisition of new loans.
According to the breakdown of the data, the total external debt for the nine states as of June 2023 stood at $861.8 million, indicating a local value of N662.9 billion, using an exchange rate of N769.25/$1.