Lagos, Ekiti, seven others are heavy debtors –FRC

Nine states of the federation are in serious debts judging by their revenue profile, the Fiscal Responsibility Commission has said.

The states are: Lagos, Ekiti, Kaduna, Cross Rivers, Ondo, Edo, Bayelsa, Ebonyi and Kwara.

In its Annual Report and Audited Accounts 2011, which was released in Abuja on Thursday, the FRC listed the nine states as being under the weight of huge debts.

The FRC also raised the alarm that given the rate of growth of the national debt and debt servicing, the nation’s debt was unsustainable except action was taken to reduce the rate of growth or increase the Gross Domestic Product growth rate.

According to the report, the total indebtedness of each of the states as of December 31, 2011 was beyond the limit set by the Debt Management Office.

The DMO had said that states’ indebtedness should never rise more than 50 per cent of their annual revenues in the previous 12 months, while the nation’s total indebtedness should not be more than 40 per cent of the GDP.

For each of the nine states, however, the total indebtedness as of December 31, 2011 was more than 50 per cent of their revenue profile.

For Lagos State, the debt to revenue ratio stood at 155.4 per cent, with the annual statutory revenue standing at N125.48bn and a debt profile of N193.44bn.

On a revenue profile of N44.97bn and a debt profile of N35.98bn, Ekiti State’s ratio stood at 80 per cent. Kaduna had a revenue profile of N63.94bn, debt profile of N40.08bn and debt to revenue ratio of 62.68 per cent.

For Cross River State, the ratio stood at 61.44 per cent on a revenue of N56.92bn and a debt of N34.97bn.

The ratios for Edo, Ondo, Bayelsa, Ebonyi and Kwara states stood at 56.03 per cent, 55.12 per cent, 54.5 per cent, 51.85 per cent, and 51.75 per cent, respectively.

Four other states whose debt to revenue ratio exceeded the states’ average of 36.36 per cent are Imo, 49.4 per cent; Ogun, 45.45 per cent; Bauchi, 41.97 per cent; and Osun, 36.52 per cent.

The least indebted states by the debt to revenue ratio include Rivers, 2.02 per cent; Borno, 3.28 per cent; Akwa Ibom, 3.88 per cent; Taraba, 6.79 per cent; Plateau, 8.02 per cent; and Adamawa, 8.72 per cent.

The FRC said the debt profile included external debts; money borrowed from banks and the capital market, but excluded debts owed to contractors, which could not be ascertained.

The FRC explained, “Only statutory revenue is used in the analysis because the states refused to supply data on their IGR. In any case, the IGR is not more than eight per cent of the states’ total except Lagos, which also refused to furnish its IGR. In essence, the omission of the IGR may not distort the result of the analysis.

“It is also pertinent to observe that the non-inclusion of the outstanding debt owed to contractors and contingent liabilities may more than offset the omission of the IGR.

“The Federal Government owes 111.63 per cent of its statutory revenue. In terms of debt to GDP ratio, the Federal Government debt stock is about 14.5 per cent. The national debt of N8.29tn is, however, about 22.1 per cent of the GDP. This is higher than the publicised figure of 17.5 per cent.

“At present, Nigeria’s GDP is growing at 7.45 per cent. The stock of debt is growing at approximately 23.75 per cent, while debt service is growing at 26.81 per cent.

“In a situation in which the growth rates of debt and debt service outstrip the growth rates of revenue and GDP, it is safe to say that debt is hardly sustainable, unless the rates of growth and GDP are stepped up and the rate of borrowing is reduced or held constant.”

For the Federal Government and its agencies, the statutory revenue stood at N5.54tn; while the debt stock stood at N6.19tn, thereby taking the debt to revenue ratio to 111.63 per cent. The entire country had a debt to revenue ratio of 85.38 per cent as of December 2011.

However, the Commissioner for Finance, Lagos State, Mr. Ayo Gbeleyi, said he was not aware of the FRC report, but noted that the state’s revenue and expenditure profiles were available for free on the government’s official website.

His counterpart in Ekiti State, Mr. Dapo Kolawole, said the claim by the FRC that the state was among the most indebted in the country was false.

Kolawole said, “The information is false and the data is wrong. Ekiti is one of the most efficient states in the country. In terms of financial management, we are very efficient and prudent.

“What I am saying is that it is embarrassing for somebody sitting somewhere in Abuja to tell me that Ekiti is one of the states that over-borrowed without crosschecking. What is the basis of statistics and how much have we borrowed compared with the state’s GDP?”

Similarly, the Ondo State Government said the report did not capture the present state of things in the state.

The Commissioner for Information, Mr. Kayode Akinmade, said things were now different from 2011, the year covered by the report.

He said, “Going by the date of the report, this could not have been the latest status of Ondo State’s debt profile because this was 2011 report.

“However, from time to time, we go to look for finance from the money and capital markets. Every state carries some debt profile, ours is very sustainable, our debt to revenue ratio is below 20 per cent.”

http://www.punchng.com/news/lagos-ekiti-seven-others-are-heavy-debtors-frc/

For Lagos State, the debt to revenue ratio stood at 155.4 per cent, with the annual statutory revenue standing at N125.48bn and a debt profile of N193.44bn.

On a revenue profile of N44.97bn and a debt profile of N35.98bn, Ekiti State’s ratio stood at 80 per cent. Kaduna had a revenue profile of N63.94bn, debt profile of N40.08bn and debt to revenue ratio of 62.68 per cent.

For Cross River State, the ratio stood at 61.44 per cent on a revenue of N56.92bn and a debt of N34.97bn.

The ratios for Edo, Ondo, Bayelsa, Ebonyi and Kwara states stood at 56.03 per cent, 55.12 per cent, 54.5 per cent, 51.85 per cent, and 51.75 per cent, respectively.

Four other states whose debt to revenue ratio exceeded the states’ average of 36.36 per cent are Imo, 49.4 per cent; Ogun, 45.45 per cent; Bauchi, 41.97 per cent; and Osun, 36.52 per cent.

The least indebted states by the debt to revenue ratio include Rivers, 2.02 per cent; Borno, 3.28 per cent; Akwa Ibom, 3.88 per cent; Taraba, 6.79 per cent; Plateau, 8.02 per cent; and Adamawa, 8.72 per cent.

The FRC said the debt profile included external debts; money borrowed from banks and the capital market, but excluded debts owed to contractors, which could not be ascertained.

I dont believe this news. The source doesnt seem credible and sounds like a parody at best

gleaf: APC KWENU!!!

hahahaha apc meka o meka o meka o

Onyegecha: No matter how much the truth is hidden, painted, distorted, buried, it will always shine forth in the end. Where are those who still think okorocha is the best governor has ever known? I weep for my dear state.

i give una smal theif una saz na big thief una want

Decryptor:

Nadia...why did you delete me from BBM?

..

ikwere militant: i give una smal theif una saz na big thief una want

who be d big thief? Who be small thief? Behind the big thief, there is Tinubu

Suddenly, agbameta, has become spokes person to imo state government on Nairaland....lol

He has 100 billion naira in loans. He collects double allocation each month. State allocation and LGA allocation since he has banned democratically elected LGA chairmen

Nadia_SA1: Chaiii my state ..

IK is from Imo?

Pukkah:

You started well but spoilt your own post with a needless tribal assault.

Okorocha joined/merged with APC this year. What was the debt level as at the time he joined? Can you prove your wild claims about funding the 'Yoruba' party?

Any governor that spends irresponsibly should not go scot free regardless of his political party.

The debt level was at 53 billion when he joined. Keep in mind that this aforementioned debt also covers Evan Enwerem's tenure, James Aneke's tenure, Tanko Zubairu's tenure, Achike Udenwa's tenure, and Ikedi Ohakim's tenure.
But in less than 4 years, he's added over 47 billion to the debt!
So, nobody should even try defending this man.
Okorocha is a criminal.
The End.

Psychedelia:

The debt level was at 53 billion when he joined. Keep in mind that this aforementioned debt also covers Evan Enwerem's tenure, James Aneke's tenure, Tanko Zubairu's tenure, Achike Udenwa's tenure, and Ikedi Ohakim's tenure.
But in less than 4 years, he's added over 47 billion to the debt!
So, nobody should even try defending this man.
Okorocha is a criminal.
The End.

Are you for real? So you believe this type of thrash to even comment on it.

Here is a more realistic figure as at October 2013 .

http://businessdayonline.com/2013/10/bayelsa-lagos-delta-akwa-ibom-top-most-domestically-indebted-states-chart/

Bayelsa, Lagos, Delta, Akwa Ibom top most domestically indebted states’ chart
October 16, 2013 |

Bayelsa, Lagos and Delta states are the most domestically indebted states in Nigeria. Also on the topmost step are Cross River, the Federal Capital Territory (FCT), Rivers, Ondo, and Akwa Ibom states.

“Seven members of the group are predictable (five oil producers, Lagos and the FCT), to which we add Ondo,’’ says FBN Capital Research, an investment and asset management company.

Data from Debt Management Office (DMO) and FBN Capital Research show that as of December 2011, Bayelsa State’s domestic debt stood at N163 billion, while that of Lagos State hit N158 billion.

Delta and Cross River states incurred N91 billion debt each, whereas the FCT’s debt profile revealed N86 billion. Rivers, Ondo and Akwa Ibom states incurred N84 billion, N48 billion and N41 billion debt, respectively.

External debt was excluded because it was guaranteed by the Federal Government. An inclusion of external debt would see Kaduna replace Akwa Ibom, but the list would otherwise remain the same, analysts say.

The total domestic debt burden of the states represented just 3.2 percent of Nigerian Gross Domestic Product (GDP).

Lagos State has thus reported GDP of N12 trillion for 2010, which would make its ratio about 2 percent. But analysts consider the threshold generous since all the states other than Lagos generate less than half of their total revenue themselves.

The DMO measures debt sustainability as total debt as a proportion of total revenues.

All the states pass the World Bank’s debt solvency test of 250 percent. At 2011, those heading the list were Cross River (139%), Bayelsa (105%), the FCT (97%), and Ebonyi (96%).

The DMO also measures liquidity as the debt service deduction by the Federal Accounts Allocation Committee as a proportion of the committee’s allocation, both on a 12-month average basis. All come below the safety threshold of 40 percent, led by Edo (36%), Abia (29%), Gombe (27%) and Ekiti (26%).

agbameta: ^^^^^^ Funny I didn't see Imo state on that list...

These useless people and their kabukabu okporoko news....smh..

Oh... Hi there, Eko Ile.
Still remember this post?

Eko Ile: This is nothing but distraction, okorosha is playing the gullible people of imo state like piano.


Dude is a drama king queen and he'll create any kind of drama to distract from his real responsibility which is governing. The man just refuse to settle down and govern sha. I feel sorry for the people of imo, they bough fake abi malfunctioning spare parts...smh.

https://www.nairaland.com/1162449/rochas-killed-ohakim-live-ait/1#13837011

Yeah. It's interesting how things have changed so dramatically. And it's even more interesting how it required just cross-carpeting to a different party to make him a progressive hero in your very short-sighted eyes.

Psychedelia:

IK is from Imo?

yes oo

For the external debt.

http://thecitizenng.com/other-news/fct-states-external-debts-grows-to-2-6b/


FCT, States’ external debts grows to $2.6b
Posted by: The Citizen in Other News August 8, 2013

The Federal Capital Territory (FCT) and the 36 states of the federation are indebted to foreign creditors to the tune of $2.641 billion as at June 30, 2013.
According to information sourced from the official website of the Debt Management Office, the debts comprise multilateral loans entered into by the various state governments. They exclude arrears owed to the Federal Government as at 30th June 2013.
According to the information, the external debt owed by the Federal Government in the period stood at $4.279billion.
Lagos State topped the chart with an external debt profile of $856.53 million, while Borno and Delta have the least external debt profile of $14.34million and $18.85 million respectively.
Lagos is followed in the second place by Kaduna with an external debt profile of $225.62 million; Cross River State has N115.01 million and Ogun $105.92 million.
The external debt profile of the states according to the DMO is as follows; (Abia $35.249 million); (Adamawa, $29.808million); (Akwa Ibom, $59.786 million); (Anambra, $27.312 million); (Bauchi $66.033); (Bayelsa 27.677 million); (Benue $29.032 million); (Borno $14.343 million); and (Delta, $18.853 million).
The others are, (Ebonyi, $41.461 million); (Edo $42.521 million); (Ekiti $35.283 million); (Enugu $51.895 million); (Gombe $32.065 million); (Imo $51.255 milliom); (Jigawa $33.414 million); (Kaduna $225.617 millin); (Kano $61.842 million); (Katsina $72.527 million).
The list also includes (Kebbi, $46.335 million); (Kogi $33.723 million); (Kwara $45.229 million); (Nassarawa $36.369 million); (Niger $30.970 million); (Ogun $105.922); (Ondo $51.830 million); (Osun $62.341 million); (Oyo $74.376 million).
The rest are (Plateau $22.340); (Rivers $38.434 million); (Sokoto $42.677 million); (Taraba $22.986 million); (Yobe $31.889 million); (Zamfara $29.461 million) and the FCT $38.396 million. – The Nation


So I wonder where and why the liars crafted this falsehood and a whole lot of others just because one man refused to share State money to old politicians. It will also do us good to compare this 2013 debt report with that of 2011 to determine if this administration has borrowed and the amount borrowed.

Psychedelia:

Oh... Hi there, Eko Ile.
Still remember this post?


https://www.nairaland.com/1162449/rochas-killed-ohakim-live-ait/1#13837011

Yeah. It's interesting how things have changed so dramatically. And it's even more interesting how it required just cross-carpeting to a different party to make him a progressive hero in your very short-sighted eyes.

Lmao, u dey mind that attention seeking troll? He extols or denigrates people based on their party. So long his myopic reasoning is concerned, anything and anybody under the umbrella of Apc is 'saintly and a saint'! Tinubu bootlicker

Psychedelia:

Oh... Hi there, Eko Ile.
Still remember this post?


https://www.nairaland.com/1162449/rochas-killed-ohakim-live-ait/1#13837011

Yeah. It's interesting how things have changed so dramatically. And it's even more interesting how it required just cross-carpeting to a different party to make him a progressive hero in your very short-sighted eyes.

This is how you village clowns fail WAEC, what's agbameta got to do with your eko ile?

I still don't know what your dumb rubbish got to do with what I posted? is Imo on the list I posted or eko ile is you clown's answer to everything under the sun? How stuupid and dumb can some of you be.

Rochas over to u. Now its time u go back to where u hide all the ones u collected and start giving them back to state parastatals that need the cos the money is not urs but for the people.

agbameta:



This is how you village clowns fail WAEC, what's agbameta got to do with your eko ile?

I still don't know what your dumb rubbish got to do with what I posted? is Imo on the list I posted or eko ile is you clown's answer to everything under the sun? How stuupid and dumb can some of you be.

You are a dumb coward.

The least you could do is to defend your shameless sycophancy than lie through your rotten teeth.

U're non other than the often disgraced Eko ile .

Nnewi1stSon: Lmao, u dey mind that attention seeking troll? He extols or denigrates people based on their party. So long his myopic reasoning is concerned, anything and anybody under the umbrella of Apc is 'saintly and a saint'! Tinubu bootlicker

You finished the sycophantic pig

drnoel: Rochas over to u. Now its time u go back to where u hide all the ones u collected and start giving them back to state parastatals that need the cos the money is not urs but for the people.

+10