Politics

The Budget of Illusion: Adeleke’s ₦705bn Gamble Risks Osun’s Financial Collapse

Published by admin on November 13th, 2025.

The Budget of Illusion: Adeleke’s ₦705bn Gamble Risks Osun’s Financial Collapse

HE Ademola Adeleke

• Half of 2025 IGR came from school fees, hospital charges

• State risks insolvency without federal allocations

By Adebayo Adedeji

The Osun State Governor, Senator Ademola Adeleke, on Wednesday presented the 2026 budget estimate of ₦705 billion to the State House of Assembly—a 65% increase from the ₦427 billion approved for 2025. According to the proposal, 55% of the revenue will go to capital projects, while 45% will be spent on recurrent expenditure.

When the 2025 budget was presented late last year, Governor Adeleke had boasted that ₦191 billion of the ₦427 billion estimate, representing 44.7%, would be devoted to scaling up capital and infrastructural projects, with the remaining 55.3% allocated to recurrent costs.

However, despite realizing ₦310 billion (72.6%) of the total budget revenue as of September 2025, only ₦202 billion (47.3%) had been spent, leaving ₦108 billion unutilized. This translates to a 47% overall budget performance. Even on a pro-rata benchmark of ₦320 billion for the third quarter, the performance would stand at just 63%—a disappointing figure for a government projecting a massive spending expansion next year.

Financial experts generally recommend no more than a 30% increase in budgetary size year-on-year for sustainability. Yet, the Adeleke administration has proposed a 65% jump despite underperforming in the current fiscal year. The ₦705 billion budget, therefore, appears unrealistic, exaggerated, and poorly conceived—more of a political showpiece designed to grab headlines and excite the governor’s supporters than a feasible financial plan.

Further analysis shows that, by the end of Q3 2025, only ₦82.8 billion, about 43% of the capital budget, had been disbursed. This means just 26% of total revenue went into capital projects, a discouraging record for a governor that prides himself as “Mr Project.”

The question then arises: how does Osun intend to fund such an insanely ambitious ₦705 billion budget in 2026 when its Internally Generated Revenue (IGR) for the first nine months of 2025 stood at a mere ₦45 billion, nearly half of which came from school fees, medical services and sale of hospital drugs? Only ₦877 million, representing 10.8% of the projected ₦8.1 billion, came from actual commercial activities.

Equally troubling is the administration’s spending pattern: ₦27 billion reportedly went into feeding, entertainment and foreign and local travels of Governor Adeleke, within just nine months. This was in contrast to N23.5 billion that was appropriated on ministries of agriculture, of health, of women/children/social affairs, of youth affairs, of sports and special needs and of science and technology, put together. The governor similarly gulped N30 billion last year and N19 billion in 2023.

In terms of total receipts for Q1-Q3 2025, the government recorded: ₦198 billion from federal allocations, ₦6 billion from federal government grants, ₦139 million from foreign grants, ₦45 billion from IGR and ₦60 billion as opening balance

Clearly, without the ₦204 billion received from federal allocations and grants, Osun State would have been financially insolvent, unable to meet its basic obligations.

Worse still, the government’s IGR sources remain largely untapped and poorly explored. For example, only ₦21,000 (0.2%) was generated from tourism, culture and arts centers, out of a projected ₦12.4 million!

The state-owned guest houses earned nothing.

Direct taxes yielded ₦402 million (6.8%) of a ₦5.9 billion target.

Development taxes brought in ₦42 million (0.7%) out of ₦6 billion projected.

Hotel occupancy and restaurant consumption taxes generated just ₦6.3 million (0.1%) of the ₦5.2 billion estimate—an unbelievable figure given the large number of hotels across the state.

Rent on government land and buildings produced only ₦54 million (11%) and ₦1.9 million (1%), respectively, of the projections.

Revenue from parks was a paltry ₦25 million (3.1%) of ₦800 million expected.

These figures reveal an administration with weak fiscal creativity and poor revenue management. A government whose primary IGR sources are tuition hikes and inflated hospital charges should not contemplate increasing its budget from ₦427 billion to ₦705 billion unless it intends to further burden and impoverish its citizens.

Governor Adeleke needs more than the current “carpenters” thinking finance for him: they have proven to be overwhelmed with the task before them. Competent economists and sound strategic thinkers are urgently needed, if not, people will be made more miserable and be driven farther into the economic abyss before the dancing governor is eventually kicked out at the poll next year.