Debts may not necessarily be bad. But in Nigerian states, there are many reasons to worry. According to BudgIT, most of our states are technically yoyo. Yes, Oyo, Kogi, Osun, Ekiti, Plateau, Adamawa, Bauchi, Gombe, Cross River, Benue, Taraba, Lagos, and Abia states were unable to fund their recurrent expenditure and loan repayments due in 2019.
Across Nigeria, we spend all the time examining the federal government without knowing that nothing is happening in the states. Lagos state seems to be out of order! I mean, the 6th largest economy in Africa needs recalibration. Rivers state seems to be in charge of its future, surprisingly.
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Update: This report has some errors which the authors have acknowledged.
“Indeed, @followlasg (Lagos State Government) cannot be included in the category of States with a recurrent deficit; thus, not borrowing to pay salaries,” BudgIT said.
“Our metrics focused on NET FAAC and IGR as published by the National Bureau of Statistics due to the disparate nature of revenue framework among Nigerian states.
“We also apologise for including a special debt financing program as part of the recurrent expenditure which might be a total representation of its finances.”
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I have always seen Rivers and Akwa Ibom as two of the most viable states in the land, even without Oil, both are strategically situated to make Lagos look very ordinary, but Nigeria being what it is, your growth is rationed, until the gods say you are now free to fly…
Lagos is a curious case, just like California, big GDP, but always heavy in debt.
Anambra used to be the most fiscally responsible state, it’s still responsible, but needs to aim higher.
It also seems that the northern states are even more fiscally responsible than their southern counterparts, all of Borno, Yobe and Zamfara are not having deficits. Maybe southern managers are loud on noise, the northern managers don’t talk much, but quietly managing their financial resources better.
It will be good to separate debts servicing component from other recurrent expenditures, that would give more insights into the managers that are most fiscally irresponsible.
Interesting insights.