The Nigeria Extractive Transparency Initiative, NEITI, yesterday, raised an alarm over the rising debt profiles of states in the country, stating that the 36 states of the Federation are indebted to the tune of N3.342 trillion as at the end of 2016.
NEITI, in the third edition of its quarterly review, titled: ‘FAAC Disbursements In 2016: Review and Projections,’ also put the total debt burden on four states – Lagos, Delta, Osun and Akwa Ibom – at N1.262 trillion as at the end of 2016. The four states accounted for 37.76 per cent of the total indebtedness of the 36 states of the federation. Again, the N3.342 trillion indebtedness of the 36 states represented 55.15 per cent of the 2016 budget of N6.06 trillion and 45.8 per cent of the 2017 budget estimates of N7.298 trillion.
According to NEITI, the indebtedness of the states became worrisome when viewed in relation to the declining revenue of the states, which had made it near impossible for the states to raise funds to finance their respective budgets. To this end, NEITI warned that the already high debt burden of the states would rise even further in the days ahead, as many of them are expected to increase their rate of borrowing to finance their budgets.
It said, “The NEITI Review noted with concerns the debt profile of the States government were rapidly on the increase. The States fell short of raising enough revenues to fund their budgets. Thus, their debt burden, which is already high, will increase further in the nearest future as they increase borrowing to fund their budgets. Considering that most states already have a high debt burden, the possibility of even higher debts for the states remains quite high.”
Lagos, highest indebted state with N603bn
Specifically, the report listed Lagos as the state with the highest debt burden, with a debt of N603.25 billion as at the end of 2016, compared to the state’s revenue of N410.5 billion in the same period. Delta State followed with N331.95 billion debt as against N142.77 billion, compared with revenue of N142.28 billion in the year under review, while Osun and Akwa Ibom states took the third and fourth place on the rising debt profile chart with N165.91 billion and N161.23billion respectively.
Others are Benue, with a debt burden of N49.15 billion; Edo N94.54 billion; Enugu N57.56 billion; while Ekiti, Kano, Katsina and Ogun are indebted to the tune of N67.29 billion, N81.05 billion, N30.03 billion and N103.75 billion respectively.
Yobe, Anambra, least indebted states
On the other hand, the report noted that Yobe and Anambra States stood out clearly as States with the least debt burden, with debts of N11.74 billion and N20.60 billion respectively as at the end of 2016. Of particular worrisome note, the report added that, “On rising debt profile, the case of Osun, Cross River and Delta states raised major concerns given the fact that their total borrowings were found by the NEITI publication to be more than double the total revenues accruing to the states.”