₦airaland Forum

•States’ debts to rise above 200% of revenue in 2023 – World Bank

•Lagos cannot execute laudable projects without loans – Commissioner

The governors of 28 states who are leaving office on May 29 or running for re-election and the Minister of the Federal Capital Territory have piled up about N5.8tn sub-national debts amid an economic crunch.

The debt figures were based on an analysis of the sub-national debts reports by the Debt Management Office.


The PUNCH reports that out of the 28 states, 11 governors will be seeking re-election in March.

They include Governors Mohammed Yahaya of Gombe; Babagana Zulum (Borno); Abdullahi Sule (Nasarawa); Seyi Makinde (Oyo); Mai Buni (Yobe); Bello Matawalle (Zamfara); Babajide Sanwo-Olu (Lagos); Ahmadu Fintiri (Adamawa); Dapo Abiodun (Ogun); Bala Mohammed (Bauchi) and Abdulrahman Abdulrazak of Kwara state.

Those that will not be seeking re-elections are Emannuel Udom (Akwa Ibom); Samuel Ortom (Benue) Ifeanyi Okowa (Delta); David Umahi (Ebonyi); Aminu Masari (Katsina); Bello Bagudu (Kebbi); Abubakar Bello (Niger); Aminu Tambuwal (Sokoto); Simon Lalong (Plateau) and Darius Ishaku of Taraba.


Other governors that are not seeking re-election include the Kaduna State Governor, Nasiru El-rufai; Abdulahi Ganduje (Kano); Victor Ikpeazu (Abia); Ifeanyi Ugwuanyi (Enugu); Ben Ayade( Cross Rivers) and Nyesome Wike of Rivers.

The sub-national debts are classified into domestic-borrowings from local creditors and external-borrowings from foreign or international creditors like the World Bank.

The domestic and external debts published on the DMO’s website were as of September 30 and June 30, 2022, respectively.

According to the reports, sub-national domestic debts were about N4.38tn while their external debts were about $3.15bn or N1.42tn based on the exchange rate of the Central Bank of Nigeria of N449.53 to a dollar as of Thursday.

The data further shows that Lagos has the highest debt, with N877.04bn domestic debt and $1.27bn foreign debt.

It is followed by Kaduna, with a domestic debt of N86.86bn and external debt of $586.78m.

The third highest debt is Rivers, with a domestic debt of N225.51bn and foreign debt of $140.18m.

In the fourth highest debtor position is Cross Rivers, with N175.2bn domestic debt and $215.75m external debt.

It is followed by Ogun with N241.78bn domestic debt and $122.73m foreign debt.

Others include Bauchi (N144.28bn domestic debt and $172.76m external debt); Enugu (N89.89bn and $123.02m); Kano (N125.19bn and $109.42m); Abia (N104.57bn and $95.63m) and Adamawa (N122.48bn and $77.01m).

Other debtor states are Akwa Ibom (N219.62bn and $46.567m), Benue (N143.37bn and $30.47m), Borno (N96.33bn and $18.7m), Delta (N272.61bn and $60.05m), Ebonyi (N67.06bn and $59.84m), Gombe (N139.1bn and $46.93m), Jigawa (N44.41bn and $27.61m), Katsina (N62.37bn and $55.82m), Kebbi (N60.13bn and $42.40m), Kwara (N109.55bn and $45.94m), and Nasarawa (N72.63bn and $53.73m).

Also on the list are Niger (N98.26bn and $69.27m), Oyo (N160.07bn and $76.97m), Plateau (N151.90bn and $33.74m), Sokoto (N85.58bn and $37.13m), Taraba (N90.81bn and $22.28m), Yobe (N92.86bn and $23.09m) and Zamfara (N109.69bn and $29.33m).

The FCT had a domestic debt of N112.49bn and external debt of $25.38m.

The PUNCH observed that these states and the FCT owed up to 81.72 per cent of the N5.36tn sub-national domestic debts and 69.08 per cent of $4.56bn external debts.


Speaking with our correspondent on Thursday over the phone, the Director, Portfolio Management Department of the DMO, Dele Afolabi, noted that each state was expected to send in quarterly information on their domestic debts.

He added that by being transparent with their debt profiles, states would be able to access more funding.

The PUNCH observed that the debt servicing is done by the Federal Government but it is deducted from the federal allocation to the states.

States’ debts

In its December 2022 edition of the Nigeria Development Update, the World Bank noted that states’ debts would rise above 200 per cent of the revenue generated in 2022 and 2023.

The report read, “Debt levels for an average state are estimated to increase from 154.6 per cent of revenues in 2021 to above 200 per cent of revenues in both 2022 and 2023.”

According to the Washington-based bank, the increase in debts will be due to low allocation from the Federation Account, which will likely weaken the fiscal condition of the states.

The report added, “The fiscal condition of sub-national governments is expected to weaken in 2022, as Federation Account transfers for the average state are estimated to decline due to weak net oil revenue collection.

“For an average state, statutory transfers—the main source of state revenue—are estimated to decline by 5.5 per cent and internally generated revenue is estimated to remain at broadly the same levels as in 2021 (declining slightly by 0.8 percent).

‘’Nevertheless, total revenues for an average state are estimated to remain broadly unchanged in nominal terms as gains in VAT revenues are estimated to offset the declines in statutory transfers. However, expenditure is expected to increase by almost 4 per cent for an average state in nominal terms, especially capital expenditure, which is estimated to increase by 17.3 per cent in nominal terms in the run-up to the 2023 general election.

“Consequently, the fiscal deficit of an average state is estimated to reach 37.9 percent of revenues in 2022, as opposed to 31 percent of revenues in 2021 and 17 percent of revenues in 2020.

‘’Recurrent expenditure between 2021 and 2022 is estimated to have contracted by almost 5.4 per cent for an average state, raising concerns about accumulation of arrears. These trends are estimated to continue in 2023 with the fiscal position of the states weakening.”

The global lender had earlier said that Nigerian states will likely lose N18.8bn in oil and gas revenues in 2022, as worsening revenue collection at the federation level increases budgetary pressures for the states.

According to the bank, the declining revenue from the federation level has put many states in a precarious fiscal position.


It warned that many states would be unable to meet up with their expenditures, adding that there was an increase in debt servicing expenditures of states.

But the special Adviser Media and Publicity to the Cross River Governor, Christian Ita blamed the state’s debt burden on previous administrations.

He stated, “The debt burden on the state is something that was inherited by this administration. Indeed, as at May 29, 2015 when the current administration came on board, the state had attained the threshold of borrowing, a situation that made it impossible for the current administration to borrow.

“The disconcerting part is that while the administration was prevented from borrowing by the Debt Management Office, the federal government has been deducting between N1.6bn to N2bn monthly from the state’s allocation, thus leaving the state in dire straits.”

Speaking on its huge debt profile, the Lagos State government explained that its domestic and foreign debts were necessary because there was no other way the government could fund the projects executed in the state.

According to the estimate made by The PUNCH, Lagos state has the highest domestic debt of N876bn and a foreign debt of $1.27 bn.

Lagos defends debts

But the state Commissioner of Information, Mr Gbenga Omotoso, insisted that the debts were sustainable and would not hinder any development after May 29, adding that what the debts were used for was what mattered.

He said, “The debts are more than sustainable. Recently, Lagos State got a Fitch AA+ rating and what it means is that we are running our finances very well and we are super creditworthy. I think we are the only state in Nigeria to have had such a rating.

“Apart from that, people say Lagos State debt is high but the problem is not the high domestic or foreign debts but what they are used for. The United States of America has the highest debt profile in the world, yet many are flocking there. To borrow money to pay salaries is bad but to borrow it to fund projects that will generate revenue and provide jobs is good.

“Lagos has a high debt profile [/i]because it has embarked on and executed a lot of infrastructural and transport projects, among many that will in turn generate income. [i]We have not expended up to 50 per cent of our Gross Domestic Product so we still have enough room to borrow money and that is why you see that people are turning over to Lagos because they know that the state is creditworthy.

“There is no way you can embark on the big projects that the Lagos State Government has executed without borrowing money. Where will the cash come from? Look at the Blue Rail, can you imagine the number of people it will be conveying daily and the jobs it has created? So there is no way you can fund that kind of project without borrowing money at all.

“This will never affect any development after May 29. In fact, if anything, it will bring more developments. By the time you say you save billions of naira to build a railway, even the people who should ride on it would have died, so one needs to find a way of funding it, and the better way is to borrow money, and local financial institutions are coming to Lagos to lend money to the government because they know the economy has a bright future.”

When contacted about the debts Governor Wike would be leaving for the incoming administration, the Rivers State Commissioner for Finance, Isaac Kamalu said he was in a meeting and could not comment.

Kaduna government

Similarly, there was no reaction from the Kaduna State Government when asked about its plans to address the huge debts on Thursday.

The Special Adviser on Media and Communication to the governor, Mr. Muyiwa Adekeye could not be reached on the phone and he did not respond to the query sent to him on the Whatsapp platform.

Officials of Ogun State Government kept mum as both the state Commissioner for Information and Strategy, Waheed Odusile and Chief Press Secretary to the state governor, Kunle Somorin did not respond to calls or messages sent to their phones.

Meanwhile, the All Progressives Congress in Delta State has kicked against alleged plan by Governor Okowa to borrow N40b.

The party in a statement on Thursday warned all commercial banks and lending institutions in the country to be wary of the outgoing PDP government in the state.

The party said, ‘’It has come to the notice of the public and to the knowledge of the All Progressive Congress that the government of Delta state is yet again negotiating a loan facility for N40b.’’

In the statement endorsed by the APC governorship candidate in Delta State, Senator Ovie Omo-Agege, the party noted with concern that “the need for such a facility has not been made public, neither has the purpose for which the credit is being sought.”

“It is also our knowledge that a bill seeking the approval for such a facility has not been presented before the House of Assembly and neither has approval been obtained”, it further stated.

Consequently, the party warned all commercial banks and lending institutions in the country to be wary of such borrowings.

The statement read partly, “Now therefore, be it known to all banks, lending institutions, credit agencies etc that any facility, loan, credit, advancement or borrowing by any other name known made or advanced to the government of Delta state in the course of the remaining tenure of the present administration will not be acceptable to the people of Delta state.

“The next administration and the citizens of Delta state will not be further encumbered by the rascality and profligacy of the present government.

“We state unequivocally that the state is over-borrowed and the citizens will not accept the encumbrance and obligations of further borrowing.’’

Source: https://punchng.com/28-govs-pile-up-N5.8tn-debts-for-incoming-govts

Here...is a successful...again...a town hall different from...

Ok

Karlovych:
Here...is a successful...again...a town hall different from...

Creativity

Welcome to Nigeria

God pls redeem this country in this election year pls.

Nigeria my country

The data further shows that Lagos has the highest debt, with N877.04bn domestic debt and $1.27bn foreign debt.

It is followed by Kaduna, with a domestic debt of N86.86bn and external debt of $586.78m.


They'll still have the Temerity to tell u to go and vote another CALAMITY bcuz they see Nigerians as brain dead people and 3rd world country mentality is really playing a huge factor



LET'S VOTE WISELY 2023 ,a new Nigeria is POssible

In as much as I detest debt ,it’s not really a bad thing if the money borrowed is invested on infrastructure that’s capable of generating returns.

USA is a model country but with a debt of 31 trillion dollars .

China debt is about 24 trillion dollars.

There is nothing wrong with borrowing. When I was in the banking industry, I fought for my bank to approve N3.5m for my cousin in 2009, who was struggling in his business at Tradefair complex. Within a period of one year, he paid off the loans and interest and scaled up his business big time. He is doing extremely well now, with two personal houses at Amuwo Odofin, Lagos. He doesn't joke with me as I was instrumental to his success.

However, in Nigeria, the value for money borrowed is nothing to write home about. The value of physical projects and what the loans were used falls short of the total loans.
Most of all these gigantic loans were used to build public toilets, low quality primary health centers, recurrent expenditure and white elephant projects.

Lagos is in a class of it's own

More than twice it's closes challenger. Omo

Nigeria as a country has a long way to go.
What's lagos government doing with all the taxes here and there for God sake.

I see bastards coming here to blame our incoming president ASIWAJU BOLA AHMED TINUBU...
Lagos will always be a class on its own.
The USA of the world.

Mtcheeew
What kind of useless zoo is this nobody is planning for the future so only Peter Obi has left office without debt and some people are still calling him criminal while a known drug dealer is saint this alone is the reason why black people don’t progress in life.

Kudus to Governor OBASEKI. of Edo State.
We Say Thank you.

Let them know you can do it without Borrowing and enslaving the future of our children

Raw wickedness in high places.

The some if u will come here and start abusing Obaseki. Edo state is not owning. Obaseki is a goal

This how Peter Obi during his time left billions for his State account instead of plunging the state into debt ....now there's really nothing wrong owing loans but the money's this governors loaned can they account for the laudable projects, jobs they did,invested, created with it to better the state economy with this ridiculous amount of loan?

Banbutton:
I see bastards coming here to blame our incoming president ASIWAJU BOLA AHMED TINUBU...
Lagos will always be a class on its own.
The USA of the world.

Even u guys' name is BATSTARDS,,u are mocking urself.. before nko? bAt don carry Lagos money run and u a big time slave still supporting him. Can u see Anambra name on the list?

Good morning Nigerians..U can see that Anambra name isn't on the list. Reason been that former Gov. Peter Obi created a foundation for his state . This is why we must vote for Obi. Look at Lagos, Iragbiji Lord has put them on number one on this list.
VOTE WISELY VOTE PETER OBI FOR PRESIDENT

Urchins ran away from commenting

How much is Ekiti , Ondo and Kogi state owing cos no development is going in in those states.

See the huge debt!!! Tinupoo has finished Lagos State patapata!

Edo nor de this list? Hmmm

adenigga:
•States’ debts to rise above 200% of revenue in 2023 – World Bank

•Lagos cannot execute laudable projects without loans – Commissioner


Source: https://punchng.com/28-govs-pile-up-N5.8tn-debts-for-incoming-govts

So Mr talk and do dey money and him and his supporters go dey run their mouth anyhow

It is finished

Banana republic

At .. pls speak the truth for once..which one be there was a nation...u are neither here nor there

There was a nation!!!