Quick Summary:
The Labour Party criticizes Ogun State’s ₦1.669 trillion 2026 budget, warning that its reliance on loans could deepen debt and threaten long-term financial sustainability.
he Ogun State Government has proposed a ₦1.669 trillion budget for the 2026 fiscal year, tagged the “Budget of Sustainable Legacy.” Governor Dapo Abiodun presented the proposal to the State House of Assembly on Wednesday, December 3, 2025, describing it as a blueprint for infrastructure expansion and economic growth.
The 2026 budget represents a 63% increase over the 2025 appropriation and is highly capital-intensive, reflecting the administration’s focus on long-term development projects.
Budget Breakdown
- Total Budget: ₦1.669 trillion
- Capital Expenditure (63%): ₦1.044 trillion
- Recurrent Expenditure (37%): ₦624.76 billion
Funding Sources
- Internally Generated Revenue (IGR): ₦509.88 billion
- Federal Allocations (FAAC, VAT, etc.): ₦554.81 billion
- Capital Receipts (Loans and Grants): ₦518.90 billion
Governor Abiodun stated that the budget aims to stimulate economic growth, enhance service delivery, and position Ogun State for long-term prosperity, with a strong emphasis on infrastructure, education, and IGR expansion.
Labour Party’s Criticism and Fiscal Concerns
The Labour Party (LP) in Ogun State has sharply criticized the proposed budget, warning that its heavy reliance on borrowing could plunge the state into unsustainable debt.
Borrowing Concerns
Comrade Abayomi Arabambi, the Labour Party’s National Vice Chairman for the Southwest, described the borrowing plan as fiscally reckless, arguing that the state does not need to borrow to fund nearly half of its capital expenditure.
He cautioned that such borrowing would burden future generations and erode the state’s financial independence, urging residents to resist any attempt to finance the budget through excessive loans.
Potential Legal Action
Arabambi further revealed that the Labour Party may pursue legal action against the Abiodun administration if it proceeds with its borrowing plans for the 2026 fiscal year, citing potential violations of fiscal responsibility laws.
Fiscal Responsibility Debate
The LP accused the government of contradicting its own claims of fiscal discipline, arguing that the proposed debt-driven approach jeopardizes Ogun State’s financial future.
In contrast, the state government maintains that the budget is carefully structured to ensure sustainability, emphasizing that all borrowing will be strategic, transparent, and development-oriented.
Government’s Defense
Officials from the Ogun State Ministry of Finance have defended the budget, asserting that the loan components are targeted at infrastructure projects capable of generating long-term economic returns.
They argue that the “Budget of Sustainable Legacy” is designed to balance growth with fiscal prudence, ensuring that every borrowed naira contributes to productive investments rather than recurrent spending.
The administration insists that the increase in IGR projections and federal allocations will help offset borrowing needs and maintain debt sustainability ratios within acceptable limits.