13 States technically insolvent, debts rise 163%
ON SEPTEMBER 25, 20204:23 AMIN BUSINESS
By Yinka Kolawole
Thirteen States in Nigeria may have become technically insolvent as an independent research report indicated they failed fiscal sustainability test.


According to the research conducted by BudgIT, a public sector-focused financial information house, the states’ revenues could not fund their recurrent expenditure obligations together with their loan repayment schedules due in 2019.

In the just released 2020 edition of its annual state of states report titled, “Fiscal Sustainability and Epidemic Preparedness Financing at the State Level”, BudgIT noted that Rivers State ranked first on the 2020 States’ Fiscal Sustainability Index, followed by Anambra, Ogun and Lagos states.


It added that among the states that are not fiscally sustainable Osun, Oyo, Kogi, Ekiti and Plateau states occupy the worst positions.

It stated: “From our 2020 State of States analysis, 13 states were unable to fund their recurrent expenditure obligations together with their loan repayment schedules due in 2019 with their respective total revenues.

“The worst hit of these 13 states are – Lagos, Oyo, Kogi, Osun and Ekiti states while the other states on this pendulum are Plateau, Adamawa, Bauchi, Gombe, Cross River, Benue, Taraba and Abia.


“Furthermore, of the remaining 23 states that can meet recurrent expenditure and loan repayment schedules with their total revenue, eight of those states had really low (less than N6 billion) excess revenue, that they had to borrow heavily to fund their capital projects.

“The worst hit are Zamfara, Ondo and Kwara who had N782.45 million, N788.22 million and N1.48 billion left, respectively.

“Based on their fiscal analysis, only five states – Rivers, Kaduna, Akwa Ibom, Ebonyi and Kebbi states – prioritised capital expenditure over recurrent obligations, while 31 states prioritised recurrent expenditure according to their 2019 financial statements.”


READ ALSO: Budget: FG to spend N12.657 trillion in 2021
The report further noted that all 36 states’ debts surged by 162.87% (N3.34 trillion), from N2.05 trillion in 2014 to N5.39 trillion in 2019, with 10 states accounting for approximately half or N1.68 trillion of this increase. Seven of these states are from the South while three are from the North.

To achieve fiscal sustainability, Damilola Ogundipe, BudgIT’s Communications Lead, said: “States need to grow their Internally Generated Revenue, IGR, as options for borrowing are reduced due to debt ceilings put in place by the Federal Government to prevent states from slipping into debt crisis. There has to be a shift from the culture of states’ overdependence on Federation Account Allocation Commission, FAAC.”


Commenting, BudgIT’s Principal Lead, Gabriel Okeowo, noted that though some states have seen some improvement in their IGR between 2014 and 2019, there is still a need to put systems in place for aggressive IGR growth within the sub-national economies.

He added that this more so as falling crude oil prices, OPEC production cuts and other COVID-19 induced headwinds are set to impact Federal Allocations over the next two years.

Vanguard


https://www.google.com/amp/s/www.vanguardngr.com/2020/09/13-states-technically-insolvent-debts-rise-163/amp/

Lalasticlala

Nah eh! No qualms
This is so sophisticated

Eko must be there shaa

“It added that among the states that are not fiscally sustainable Osun, Oyo, Kogi, Ekiti and Plateau states occupy the worst positions”

13 states were unable to fund their recurrent expenditure obligations together with their loan repayment schedules due in 2019 with their respective total revenues.

“The worst hit of these 13 states are – Lagos, Oyo, Kogi, Osun and Ekiti states while the other states on this pendulum are Plateau, Adamawa, Bauchi, Gombe, Cross River, Benue, Taraba and Abia.

Lol..

I thought they said Oyo can feed the entire East?

Even ebonyi is doing better than them.

The East got no time for frivolities.

Wish we can do better and compete with USA and east Asia.

Let them stop receiving oyel money and see if all those states won't be placed on eBay

Wow

helinues:
Let them stop receiving oyel money and see if all those states won't be placed on eBay

Can you say this without crying please

Kriss216:

Can you say this without crying please

Anger, envy and insult are their regular trademark

The Ebonyi state some animals do laugh @ is doing very much better than most states.

wow even ebonyi of yestaday is doing better than most sophisticated state

[s]

helinues:


Anger, envy and insult are their regular trademark

[/s]

My sophisticated brother, the Lord is your strength

APC states are getting worse...they totally lack governance, and their oga at the top is indirectly encouraging them to loot their states dry.

If you tell them that he who goes about borrowing also goes about sorrowing they won't agree.
If you borrow and build a road and do not toll the road, how will you pay back the loan and mind you if its to be deducted from allocation you will suffer for it the way aregbeshola wrecked osun state.

Boosting igr is the key and can be done a smart way like obaseki is doing in Edo state and not use of touts and God fathers.

The problem I keep highlighting is debt and high recurrent expenditure on salaries/pensions. States like Lagos took up dollar-denominated debt in the Fashola years. A loan of $1bn 10 years ago would have cost N155bn to pay the principal (not to mention interest costs) but is now N380bn (not sure what the official exchange rate is).

This leaves little or nothing for successive governments to pay for capital expenditure: building/repairing roads and bridges.

Tax revenues are swallowed up in paying for debt and salaries.

It won't be easy for Nigerians for the remaining days Of APC government, but how can Lagos not be in that list.

All these papers works are just nonsense

Analysis that hardly reflect situation on ground.

The Ebonyi federal some wolves do laugh @ is doing very much better than majority federals.

g

Lagos what happens when

tobechi74:
Lagos what happens when

Tinubu through sanwolu has bastardized lagos state.

Lagos must be librated from the clutches of satanfathers godfathers.

AmericanQuarter:


“The worst hit are Zamfara, Ondo and Kwara who had N782.45 million, N788.22 million and N1.48 billion left, respectively.


Vanguard


https://www.google.com/amp/s/www.vanguardngr.com/2020/09/13-states-technically-insolvent-debts-rise-163/amp/

Lalasticlala

ondo people this is time to correct the mistake by voting out aketi.

raker300:
“It added that among the states that are not fiscally sustainable Osun, Oyo, Kogi, Ekiti and Plateau states occupy the worst positions”

13 states were unable to fund their recurrent expenditure obligations together with their loan repayment schedules due in 2019 with their respective total revenues.

“The worst hit of these 13 states are – Lagos, Oyo, Kogi, Osun and Ekiti states while the other states on this pendulum are Plateau, Adamawa, Bauchi, Gombe, Cross River, Benue, Taraba and Abia.

Lol..

I thought they said Oyo can feed the entire East?

Even ebonyi is doing better than them.

The East got no time for frivolities.

Wish we can do better and compete with USA and east Asia.

No, you didn't get it.

The whole of SE is just like 5 LGAs in Oyo state.

Put SE inside Oyo state, it will just be like creating additional 5 LGAs. But as it is now, the SE receives almost 5 times the allocation of of Oyo state.

Merge the whole of SE into one state and be receiving just one state allocation. You will see the state (SE) becoming poorer than Niger Republic.

The SE should thank Gen Sani Abacha for creating Abia and Enugu state. As you can see, Abia state, which is barely the size of a LGA in Oyo state yet receiving almost same allocation as Oyo is still managing to survive.

That's the point.

Ebonyi that idiots mic always, some tag low, ugly, poverty stricken, inviable and bla bla bla is actually doing well than their supposed high ranking state.

E go shock Una wicked souls

helinues:
Let them stop receiving oyel money and see if all those states won't be placed on eBay

Which oyel money
Or were people not living and surviving before oil was discorvered


Abi e be like say you don dey reason like IPOB miscreants and chestbeaters.

Simplyleo:

No, you didn't get it.

The whole of SE is just like 5 LGAs in Oyo state.

Put SE inside Oyo state, it will just be like creating additional 5 LGAs. But as it is now, the SE receives almost 5 times the allocation of of Oyo state.

Merge the whole of SE into one state and be receiving just one state allocation. You will see the state (SE) becoming poorer than Niger Republic.

The SE should thank Gen Sani Abacha for creating Abia and Enugu state. As you can see, Abia state, which is barely the size of a LGA in Oyo state yet receiving almost same allocation as Oyo is still managing to survive.

That's the point.

That's why we are fighting for Oduduwa Republic so we can no longer be collecting allocations like beggars.

Yoruba must be great and independent.

SLAP44:


That's why we are fighting for Oduduwa Republic so we can no longer be collecting allocations like beggars.

Yoruba must be great and independent.

If your sarcasm is to be assessed, your score is less than zero percent because it is not even acceptable in its literal context.

You are referring to the agitation of ipob to exit the country, though you obviously lack the appropriate literary diction to potray your point.

Having said that, last time I checked, Buhari did not handcuff any governor to go to Abuja to collect its state's allocation. They all go there every month caps in hands on the queue for the allocation. SE states inclusive.

I know you will come back with some jaundiced illogical and incoherent derailing horseshit. But note, I wont waste my time moving in one stupid circus. Meaning, don't bother quoting me again cos I won't respond.

Simplyleo:

If your sarcasm is to be assessed, your score is less than zero percent because it is not even acceptable in its literal context.

You are referring to the agitation of ipob to exit the country, though you obviously lack the appropriate literary diction to potray your point.

Having said that, last time I checked, Buhari did not handcuff any governor to go to Abuja to collect its state's allocation. They all go there every month caps in hands on the queue for the allocation. SE states inclusive.

That's why the real omoluabis are fighting for Oduduwa Republic so they can no longer be collecting allocations like beggars from Abuja.

Yorubaland has the potential to be great and independent.

SLAP44:


That's why the real omoluabis are fighting for Oduduwa Republic so they can no longer be collecting allocations like beggars from Abuja.

Yorubaland has the potential to be great and independent.

Okay.

But I have modified my response with an additional paragraph.

Below is the addition:

I know you will come back with some jaundiced illogical and incoherent derailing horseshit. But note, I wont waste my time moving in one stupid circus. Meaning, don't bother quoting me again cos I won't respond.

This is why propaganda is very dangerous. What happened to all those sophisticated IGR that they disturb us with on nairaland..

Ogun state should thank its god that its close to lagos. if not, that state will be like the rest.

horsepower102:
This is why propaganda is very dangerous. What happened to all those sophisticated IGR that they disturb us with on nairaland..

Ogun state should thank its god that its close to lagos. if not, that state will be like the rest.

At least the reason ogun state should thank God is that it is close to another S Western state (same state already ruined by Tinubu according to ipob lunatics), not because it is close to any S Eastern state.

We must sit up

Simplyleo:

At least the reason ogun state should thank God is that it is close to another S Western state (same state already ruined by Tinubu according to ipob lunatics), not because it is close to any S Eastern state.

Lagos is a south western state just like Abuja is a north central state. Those who make those two places thrive are not the indigenes. But of course I know your next line of argument. You will claim yorubas built lagos the way it is.

If so what happened to the 5 remaining states? And what about porto novo that share the same geography as lagos and inhabited by yorubas?