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List Of 8 States That Landed In Financial Distress And Why by Redcrafton: 3:30pm On Nov 30, 2020
Why eight states landed in financial distress —Report

FOR their inability to generate enough revenue to pay workers, other debts, and prioritizing recurrent over capital expenditures, eight states in Nigeria have landed in financial distress.


Fresh report published by BudgIT showed that their respective total revenue was not enough to fund their recurrent expenditure obligations (salaries, overhead, debt service obligations) and meet their respective loan repayment schedules that were due in 2019.

According to BudgIT, the worst hit of these eight states are [i]Osun, Bauchi , Plateau, Gombe, Adamawa, Ekiti, Kogi and Oyo State.[/i]

“This could indicate early signs of distress particularly for states in this category who have very low revenue generation capacities. “Without cutting down certain components of their recurrent expenditure or radically growing their internally generated revenue, the affected states may have to borrow to fund parts of their recurrent expenditure. Finance experts describe financial distress as any situation where an individual’s or company’s financial condition leaves them struggling to pay their bills, especially loan payments due to creditors. Severe, prolonged financial distress may eventually lead to bankruptcy,” the report read in part. In its 2020 Revised State of States Reports, which measure epidemic preparedness of states, BudgIT stated that soaring debt burden, imprudent fiscal planning, and nearly a decade of misplaced expenditure priorities have beaten a clear path to fiscal crisis for a majority of Nigeria’s 36 states.

In the 2020 Fiscal Sustainability Index, some states ranked higher than others, but most are still below the sustainability point, except for Rivers State which occupies the number one position on the index. It noted that Rivers State is able to meet its recurrent expenditure with only internally generated revenue (IGR) and value added tax (VAT).

It also has a total revenue greater than its total debt and prioritises capital over recurrent expenditure. It further stated that states already face significant human development issues – poverty, unemployment, underemployment, avoidable disease outbreaks (excluding COVID-19) and a host of third-world problems.

“To solve these issues, each state needs to, first and foremost, be a sustainable subnational entity – that is, the state is generating enough revenue to pay its workers, its creditors and still have significant left over to cover capital expenditure interventions for solving development issues,” the organization advised.

Based on their fiscal analysis, only five states in the country, according to BudgIT, are prioritising capital expenditure over recurrent obligations.

They are Rivers, Kaduna, Akwa Ibom, Ebonyi and Kebbi.
“However, the quality of the capital expenditure still leaves much to be desired as explored in the narratives for the respective state profiles.

“The remaining 31 states in the country prioritised recurrent expenditure according to their 2019 financial statements.

“Recurrent expenditures are not necessarily a bad thing especially when skewed towards sectors like health and education which have expenses like payment of teachers and doctors salaries that are recurrent in nature.

“However, of the states in this category, 11 had overhead costs that were larger than their capital expenditures. These 11 states are: Adamawa, Bauchi, Bayelsa, Benue, Ekiti, Kano, Kogi, Kwara, Nasarawa, Plateau, Taraba,” the report read in part.

https://tribuneonlineng.com/why-eight-states-landed-in-financial-distress-report/

11 Likes 3 Shares

Re: List Of 8 States That Landed In Financial Distress And Why by Iamgrey5(m): 3:37pm On Nov 30, 2020
Why won't Oyo state be in distress when Makinde has been borrowing billions to build bus stops?

I am afraid Oyo might become another Kogi very soon.

50 Likes 1 Share

Re: List Of 8 States That Landed In Financial Distress And Why by helinues: 3:40pm On Nov 30, 2020
They should place them on OLX

64 Likes 4 Shares

Re: List Of 8 States That Landed In Financial Distress And Why by Charmingrascal(m): 3:42pm On Nov 30, 2020
Redcrafton:

FOR their inability to generate enough revenue to pay workers, other debts, and prioritizing recurrent over capital expenditures, eight states in Nigeria have landed in financial distress.

Fresh report published by BudgIT showed that their respective total revenue was not enough to fund their recurrent expenditure obligations (salaries, overhead, debt service obligations) and meet their respective loan repayment schedules that were due in 2019.

According to BudgIT, the worst hit of these eight states are Osun, Bauchi , Plateau, Gombe, Adamawa, Ekiti, Kogi and Oyo State.


“This could indicate early signs of distress particularly for states in this category who have very low revenue generation capacities. “Without cutting down certain components of their recurrent expenditure or radically growing their internally generated revenue, the affected states may have to borrow to fund parts of their recurrent expenditure. Finance experts describe financial distress as any situation where an individual’s or company’s financial condition leaves them struggling to pay their bills, especially loan payments due to creditors. Severe, prolonged financial distress may eventually lead to bankruptcy,” the report read in part. In its 2020 Revised State of States Reports, which measure epidemic preparedness of states, BudgIT stated that soaring debt burden, imprudent fiscal planning, and nearly a decade of misplaced expenditure priorities have beaten a clear path to fiscal crisis for a majority of Nigeria’s 36 states.

In the 2020 Fiscal Sustainability Index, some states ranked higher than others, but most are still below the sustainability point, except for Rivers State which occupies the number one position on the index. It noted that Rivers State is able to meet its recurrent expenditure with only internally generated revenue (IGR) and value added tax (VAT).

It also has a total revenue greater than its total debt and prioritises capital over recurrent expenditure. It further stated that states already face significant human development issues – poverty, unemployment, underemployment, avoidable disease outbreaks (excluding COVID-19) and a host of third-world problems.

“To solve these issues, each state needs to, first and foremost, be a sustainable subnational entity – that is, the state is generating enough revenue to pay its workers, its creditors and still have significant left over to cover capital expenditure interventions for solving development issues,” the organization advised.

Based on their fiscal analysis, only five states in the country, according to BudgIT, are prioritising capital expenditure over recurrent obligations.

They are Rivers, Kaduna, Akwa Ibom, Ebonyi and Kebbi. “However, the quality of the capital expenditure still leaves much to be desired as explored in the narratives for the respective state profiles.

“The remaining 31 states in the country prioritised recurrent expenditure according to their 2019 financial statements.

“Recurrent expenditures are not necessarily a bad thing especially when skewed towards sectors like health and education which have expenses like payment of teachers and doctors salaries that are recurrent in nature.

“However, of the states in this category, 11 had overhead costs that were larger than their capital expenditures. These 11 states are: Adamawa, Bauchi, Bayelsa, Benue, Ekiti, Kano, Kogi, Kwara, Nasarawa, Plateau, Taraba,” the report read in part.

https://tribuneonlineng.com/why-eight-states-landed-in-financial-distress-report/


Nigeria as a Country is in distress as a result of a clueless monster that is ruling the Nation

Buhari and his cursed government have nothing good to offer us

23 Likes 1 Share

Re: List Of 8 States That Landed In Financial Distress And Why by techmo(m): 3:46pm On Nov 30, 2020
cool



Within 2 years in office Makinde borrowed 30billion from UBA and first bank , and 100 billion in bond .. lol

I wonder how debt burden Oyo State would be in 2023

It's better to vote Financial Expert than an Engineer

Case Study Eng Aregbesola and Eng Seyi Makinde... Pilling up debt on utterly stupid construction which are not economically feasible






.

35 Likes 4 Shares

Re: List Of 8 States That Landed In Financial Distress And Why by agadez007(m): 4:04pm On Nov 30, 2020
Remove Oyo,Ekiti and Osun from that list
Those states according to Nairaland Afonja media team are the richest in Nigeria nay Africa

104 Likes 13 Shares

Re: List Of 8 States That Landed In Financial Distress And Why by BastardWike: 4:07pm On Nov 30, 2020
Out of the eight worst most bankrupt states in Nigeria, three are from the SW and the rest North.

I just summarized the article and it points to our earlier projections that these PIG states will be hardest hit as Nigeria's economic downturn worsens going forward undecided

59 Likes 7 Shares

Re: List Of 8 States That Landed In Financial Distress And Why by samincredible44(m): 5:07pm On Nov 30, 2020
Everybody look well most of these states voted for buhari.

59 Likes 8 Shares

Re: List Of 8 States That Landed In Financial Distress And Why by Racoon(m): 5:15pm On Nov 30, 2020
Change and next level states in financial distress.Even Yahaya Bello's Kogi state-that said he is capable of replacing the dullard is not also spared.

18 Likes 3 Shares

Re: List Of 8 States That Landed In Financial Distress And Why by Enudapan: 5:45pm On Nov 30, 2020
Nah eh! No qualms
This is so unsophisticated

I Know Eko the odogwu state
Can't be there
Lasgid the greatest
Eko oni baje

9 Likes

Re: List Of 8 States That Landed In Financial Distress And Why by 900warriorz: 5:45pm On Nov 30, 2020
Buhari, you no get choice, we go still blame you

21 Likes 1 Share

Re: List Of 8 States That Landed In Financial Distress And Why by uptimum123(m): 5:46pm On Nov 30, 2020
This is bound to happen untill each states starts harnessing their God given natural resources.

It's gonna be a long journey to get to where we use to be in the olden days with our over reliance on oil.

2 Likes

Re: List Of 8 States That Landed In Financial Distress And Why by ProfAmaben(m): 5:46pm On Nov 30, 2020
No Eastern state, wow! Osun on the beats

47 Likes 3 Shares

Re: List Of 8 States That Landed In Financial Distress And Why by Whiteshield: 5:46pm On Nov 30, 2020
agadez007:
Remove Oyo,Ekiti and Osun from that list
Those states according to Nairaland Afonja team are the richest in Nigeria nay Africa

Despite the situation in those states, hopeless Biafrans still enter night bus to those states to go and hawk gala and handkerchief.
They had to flog the Eze Ndigbo of Akure like a wild goat before he started behaving himself.

55 Likes 9 Shares

Re: List Of 8 States That Landed In Financial Distress And Why by Kobicove(m): 5:46pm On Nov 30, 2020
Before I even opened the thread I expected to find Osun State on the list... I was not disappointed undecided

30 Likes 2 Shares

Re: List Of 8 States That Landed In Financial Distress And Why by 24SEVEN: 5:47pm On Nov 30, 2020
In the 2020 Fiscal Sustainability Index, some states ranked higher than others, but most are still below the sustainability point, except for Rivers State which occupies the number one position on the index. It noted that Rivers State is able to meet its recurrent expenditure with only internally generated revenue (IGR) and value added tax (VAT)


I dedicate this line to Hunchogee, Ilaumoh and Blackking98. Akwa Ibom gang that feels Rivers is their mate. cheesy

4 Likes 3 Shares

Re: List Of 8 States That Landed In Financial Distress And Why by iHart(m): 5:47pm On Nov 30, 2020
I can see Abia State on the list

1 Like

Re: List Of 8 States That Landed In Financial Distress And Why by oluwaSavage: 5:47pm On Nov 30, 2020
Different Day, Same Bullshitss.
Few more years, everything will just scatter.
From Buhari to Councillors, they are all clueless and very useless; irrespective of their evil party.

APC PDP BMC NTA ZZ2 RRA MMM, all na nonsense.

4 Likes

Re: List Of 8 States That Landed In Financial Distress And Why by Nobody: 5:47pm On Nov 30, 2020
Too bad, Businesses are worst hit
May God heal our Economy

3 Likes

Re: List Of 8 States That Landed In Financial Distress And Why by Coldie(m): 5:47pm On Nov 30, 2020
The day oil go finish for Nigeria rich states go get big problem poor states would want to dive mind body and soul into them sharing their IGR

1 Like

Re: List Of 8 States That Landed In Financial Distress And Why by Dpharisee: 5:47pm On Nov 30, 2020
Whiteshield:


Despite the situation in those states, hopeless Biafrans still enter night bus to those states to go and hawk gala and handkerchief.
They had to flog the Eze Ndigbo of Akure like a wild goat before he started behaving himself.

From all of us at we wonder why no Igbo state was mentioned in this report of bankrupt states. They deserve to be given the opportunity to take our country out of the woods by our darling daddy

31 Likes 3 Shares

Re: List Of 8 States That Landed In Financial Distress And Why by Triangles1(m): 5:48pm On Nov 30, 2020
Apart from Lagos and the oil state the remaining state in nigeria are been affected by kwashiorkor.

3 Likes

Re: List Of 8 States That Landed In Financial Distress And Why by OgaTheTop2: 5:49pm On Nov 30, 2020
smiley
Re: List Of 8 States That Landed In Financial Distress And Why by Nobody: 5:50pm On Nov 30, 2020
The truth of the matter is, Nigerian states do not charge enough taxes.

Overall, our tax to gdp ratio is 5.8%. Attempts to charge extra taxes in Nigeria are always met with protests and 'what have they done with the money they have'?

Yes, I agree they should cut the salaries of the National assembly, which at the end of the day will not yiled enough to cater for all the states. Yes, they should fight corruption, which is good...until Nigerians start opposing anti-corruption efforts...like ASUU just did with IPPIS.

But when you don't charge enough taxes, problems start.

Nigerians live on the myth that the oil money we have can cater for everyone's needs. The truth is, it can't. We needf oil to be at least $139 per barrel before we can say that we have enough for all pour needs...and it is that way because of our large populaiton. As things stand, for our earnings to cater for our needs, we need to cut our population overnight by 160million people ( poison gas or alien invasion?..okay i'm being too morbid here).

South Africa and Ghana have tax to gdp ratios of 24% and above. And they have their own share of corrupt polticans and leaders (one ANC bigwig is in trobule for bribes and corruption in Azania right now)..and they have enough cash to pay their workers.

Nigeria is an entity made up of states who don't want to act like states and don't want to be innovative. Everyone rather waits for oil money. I think that we should introduce resource control. Oil states control 90% of the revenue from their earnings. Maybe many OTHER states will start taxing the GDP more heavily...and see their money grow.

7 Likes 1 Share

Re: List Of 8 States That Landed In Financial Distress And Why by BestAndUnique(m): 5:50pm On Nov 30, 2020
Clueless government
Re: List Of 8 States That Landed In Financial Distress And Why by olaboy33(m): 5:50pm On Nov 30, 2020
Osun is in a really bad shape economically.

Tinubu, rather than brag of how well he is richer than osun state, needs to concentrate on osun and perform the magic he performed in Lagos by putting competent hands to fix osun.

I don't know what's happening in Oyo. I think there's just so many mouths to feed.

Play nice governor, Seyi makinde has improved Oyo's IGR (now 6th in Nigeria) without increasing tax (God knows how).

It appears he needs to do more, probably look into tax again. He must also understand he can't satisfy everyone in the state. 2nd term would sort itself.

4 Likes

Re: List Of 8 States That Landed In Financial Distress And Why by November1857(m): 5:50pm On Nov 30, 2020
The poorest region in the South "SE"' according to the yaruba's bureau of statistic is not there.

And my SS states are not there as well !

31 Likes 2 Shares

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