There is a looming debt crisis in states as available figures indicate that their borrowings have far exceeded total revenues.
According to data from the National Bureau of statistics (NBS), the total debt of the states stood at over N7 trillion, as at the end of 2017, while total revenue for the period amounted to N2.67 trillion – N1.74 trillion from the federation account and N936 billion as total internally generated revenue.
The states with higher debt to revenue are Osun, Ekiti, Plateau, Cross River, Zamfara, Kogi, Imo, Oyo, Nasarawa, Bauchi, Adamawa, Taraba, Benue, Delta, Akwa Ibom, Gombe, Abia, Edo, Bayelsa, Kebbi, Kaduna, Ogun, Enugu, Borno and Ondo, as contained in the NBS data.
With the total internally generated revenue of the states at N936, 471,407,367.06 compared to the total debt stock (N3.25trn), analysts raise concerns that most of the states cannot function without monthly the Federal Government allocation.
According to data from the Debt Management Office (DMO), the states debt, however, account for 21.77 percent of the country’s total debt stock.
Godwin Emmanuel Oyedokun, business analyst, fears that there may soon be crisis in the states as the government is obviously incurring debt than their revenue, stressing that most of these borrowings are often not necessary.
According to Oyedokun, “The states are not doing well as regarding their internally generated revenue, which means the states may continue to be poor as they are expected to keep servicing the debt. The borrowing most times are not necessary only that some governors are borrowing to do projects to show that they are working, and raising debt for the subsequent government after them.”
The states’ 2017 total debt stock was N58 billion higher than their total revenues in the same year. The total debt stock comprised of external debts and domestic debts, while the total revenue included revenues from net Federation Account Allocation Committee (FAAC) allocations, and internally generated revenue (IGR).
“These debt acquired is not in the favour of the states or the people, it is political,” Oyedokun stresses.
BusinessDay further analysis of the NBS revenue/debt data shows that in 2017, while Osun recorded total revenue of N22.167 million, its debt stood at N138.336 million. Ekiti State’s total revenue stood at N30.601 million, but with a N117.573 million debt. Plateau State’s total revenue was reported at N40.408 million, but total debt settled at N122.379 million.
Cross River recorded total revenue of N41.556 million and N125.81 million debt; Zamfara revenue stood at N34.476 million and N69.958 million debt, while Kogi’s revenue for the period stood at N50.891 million and N102.392 million debt. For Oyo State, N66.921 million revenue was recorded as against N129.306 million debt; Imo had N44.967 million revenue as against N80.848 million debt; Nasarawa at N41.371 million revenue as against N71.422 million debt.
Others include Bauchi at N43.884 million revenue as against N69.703 million debt; Adamawa at NN43.637 million against N60.749 million debt; Benue at N52.200 million revenue against N74.972 million debt; Taraba at N39.686 million against N60.877 million debt; Delta at N163.091 million revenue as against 228.386 million debt; Akwa Ibom at N159.571 million revenue against N189.327 million debt.
Gombe at N36.505 million against N41.978 million debt; Abia at N53.793 million and N60.749 million debt; Edo at N62.187 million revenue and N68.746 million; Bayelsa at N117.782 million revenue and N129.517 million debt; Kebbi at N44.470 million revenue and N48.777 million debt; Kaduna at N77.337 million revenue and N84.063 million debt; Ogun at N101.021 million revenue and N106.637 million debt; Borno at N51.519 million revenue and N54.064 million debt and Ondo at N56.825 million revenue and N58.601 million debt.
However, the states with positive debt to revenue ratio include Anambra, which had N58.703 million revenue and N2.698 million debt; Sokoto at N50.262 million revenue and N26.069 million debt; Yobe at N43.091 million revenue and N26.497 million debt; Kastina at N52.369 million revenue and N31.184 million debt; Jigawa at N51.914 million revenue and N33.303 million debt.
Kwara’s revenue was recorded at N52.745 million revenue and N40.315 debt; Niger at N48.991 and N40.088 million debt; Kano at N107.558 million revenue and N92.323 million debt14.16 percent, Lagos at N432.662 revenue and N364.758 debt; Rivers at N209.117 million revenue and N191.222 million debt, and Ebonyi at N40.593 million and N34.676 million debt, respectively.
Analysis shows that the entire revenue generated internally by the 36 states in the country in 2017 was 12.69 percent of their total debt stock.
Analysts suggest that states will require over eight years to settle the debts if N916 billion yearly is to be used as their IGR.
Auwal Ibrahim Musa, executive director, Civil Society Legislative Advocacy Centre, told BusinessDay exclusively that the indebtedness was due to lack of effective planning, corrupt leadership and bad governance in states.
“The leadership of these states lack developmental plan for effective management of the state’s affairs and have no economic activities hence are not able to cater for expenditure with their revenue.
“The head of these states are not planning; they are only out to siphon public funds, so there will definitely be issues concerning the well-being of the citizens,” he said.
He said, “Going forward, I think these states should come up with more economic activities that will bring in income to the states. They should be serious in tackling corruption and mismanagement of the state’s fund.”
