The Oyo State House of Assembly has approved Governor Seyi Makinde’s request for a ₦100 billion loan from United Bank for Africa (UBA) Plc to support infrastructure projects across the state.
The lawmakers also approved a separate ₦300 billion refinancing arrangement intended to transfer an existing contractors’ finance facility from Access Bank to UBA at a lower interest rate.
The decisions followed a request by Governor Makinde in a letter addressed to the Speaker of the Assembly, Adebo Ogundoyin, which was presented during plenary on Wednesday, October 21, 2026.
Why Oyo State Wants the ₦100 Billion Loan
According to reports on the Assembly’s deliberations, the fresh ₦100 billion facility is intended to provide additional funding for critical infrastructure projects and accelerate the completion of ongoing developments.
Projects mentioned during the discussions include the Rashidi Ladoja Circular Road, the Ido–Eruwa Road and the Ladoke Akintola University of Technology (LAUTECH) Teaching Hospital project in Oyo town.
Lawmakers supporting the arrangement argued that completing ongoing projects could improve transportation, strengthen access to public services, create employment opportunities and support commercial activities across Oyo State.
How the ₦300 Billion Refinancing Arrangement Works
The separate ₦300 billion facility is designed to refinance an existing contractors’ finance arrangement obtained from Access Bank.
Reports indicate that the existing facility carries an interest rate of 26 per cent, while the proposed refinancing arrangement with UBA would reduce the rate to 22 per cent.
This represents a reduction of four percentage points in the interest rate on the existing facility. The change is expected to reduce borrowing costs, although the actual savings will depend on the outstanding balance and applicable repayment terms.
The distinction matters: the ₦300 billion arrangement concerns refinancing an existing obligation. It should not be confused with a separate ₦300 billion cash loan being newly borrowed for additional spending.
What Are the Terms of the New ₦100 Billion Loan?
Reports on the approved financing terms provide the following details:
- Loan amount: ₦100 billion.
- Lender: United Bank for Africa (UBA) Plc.
- Interest rate: 22 per cent, subject to review in line with prevailing money-market conditions.
- Repayment period: 48 months.
- Management fee: 0.25 per cent per annum on the outstanding balance.
- Advisory fee: 0.5 per cent annually on the outstanding balance.
- Moratorium: Three months on principal and interest repayments, with interest accruing during that period to be repaid alongside subsequent instalments.
These terms are important because the total cost of borrowing depends not only on the headline interest rate but also on fees, repayment arrangements and the amount outstanding over time.
What Does the Approval Mean for Oyo Residents?
The state government’s stated objective is to provide funding for infrastructure projects and help complete developments already underway.
If the financing is implemented as described and the projects are completed effectively, residents could benefit from improved roads, better access to public facilities and increased economic activity.
However, the approval also places importance on transparency, proper use of public funds and the government’s ability to meet its repayment obligations without putting excessive pressure on other public services.
Residents will ultimately judge the arrangement by the projects delivered, the value received for public money and the state’s ability to manage its finances responsibly.
Why the Loan Has Attracted Attention
Large public borrowing decisions often generate debate because they involve a balance between financing development and managing future financial obligations.
Supporters of the arrangement point to the need to finish infrastructure projects and the potential benefit of refinancing existing debt at a lower interest rate. Critics may question the size of the new borrowing, the costs involved and the long-term effect on state finances.
Assessing the decision fairly requires examining the full loan terms, the projects funded, the benefits delivered and the state’s repayment capacity.
Conclusion
The Oyo State House of Assembly’s approval gives Governor Seyi Makinde’s administration legislative backing to proceed with the reported financing arrangements: a fresh ₦100 billion loan for infrastructure and a separate ₦300 billion facility to refinance existing contractors’ financing.
The two arrangements serve different purposes. While the new loan creates an additional borrowing obligation, the refinancing facility is intended to restructure an existing obligation at a lower interest rate.
The key questions going forward are how the funds will be deployed, whether the expected infrastructure benefits will materialise and how effectively the state manages the associated financial commitments.
Sources:
- Punch — Oyo Assembly approves ₦100bn loan and ₦300bn debt refinancing deal
- The Guardian — Oyo Assembly approves ₦100bn for infrastructure
- Vanguard — Oyo Assembly approves Makinde’s fresh loan and debt refinancing
The report reflects published accounts of the Assembly’s approval. Readers should consult official state and legislative documents for the complete financing terms and implementation details.