BudgIT Nigeria, a civic tech organisation, has expressed worries
over the increasing rate of debt profile of states.
Speaking at the launch of the organisation’s
state of state report in Abuja on Thursday, Oluseun
Onigbinde, BudgIT’s lead partner, said the exchange rate has made it
difficult to service such loans.
He said states’ debt rose from N3.03trillion
in 2015 to N3.89 trillion in 2016.
According to him, Lagos has 24.2 percent of
the total debt stock of state governments, having risen from N500.8bn in
2014 to N734.7bn in 2016.
“Total debt stock of Nigerian states has
increased significantly from the 2012 level of N1.79tn to N2.12tn in 2014. With
increased inability to meet recurrent expenditure obligations and increased
pressure, most states resort to more debt uptake,” he said.
“Total debt profile of states in 2015 and 2016
was N3.03tn and N3.89tn respectively. Lagos state’s total debt stock rose from
the 2014 level of N500.8bn to N734.7bn in 2016 – accounting for 24.2 percent of
the total debt stock of the state governments.”
Onigbinde, therefore, called on state
governments to increase their internally generated revenue by
taking advantages of value-added tax revenue, manufacturing, trade,
logic and tourism to generate more money.
“Many state governments are confronted by
rapidly rising budget deficits as they struggle to pay salaries and meet
contractual obligations and overheads due to a dip in oil price from its peak
price of about $140 per barrel to about $56 per barrel.
“Over the last few months, many state
governments have been devising policy changes with a strong focus on improving
internally generated revenue and reining in expenditure.
“State governments need to tremendously
embrace a high level of transparency and accountability, develop workable
economic plans, take haircuts-especially on overheads-expand their internally
generated revenue (IGR) base, and cut down on debt accumulation without a
concrete repayment plan.
“The states need to look beyond the rhetorics
and commit to a reduction in its operating costs, including significantly
slashing its unreasonable overheads bill while freeing up more spending for
social infrastructure.
“States will need to link future borrowing to
sustainable projects, which can pay back the capital cost of its current loans
and improve the overall income profile of the state.”
A report released by the office of the
accountant-general of the federation showed that 36 states of the federation spent N2.67 billion toservice external debt in September.
The governors of the 36 states on Tuesday
asked the federal government to release the 50 percentbalance of Paris Club refund.
Download the full report via State of states report
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