Technology-driven civil organisation BudgIT, in its latest report, disclosed that the 36 states in the Federation have a cumulative debt of N5.86 trillion, representing a growth of 8.78 percent from its 2019 figure.
In its 2021 State of States report, BudgIT noted that states collectively owed N5.86 trillion in 2020 from the N5.39 trillion owed in 2019.
Highlighting factors driving the debt, the report cited the volatility of the exchange rate that saw “the value of the naira jump from N305.9/$1 in 2019 to N380/$1 as of December 31st 2020.”
The fluctuating exchange rate also negatively impacted states that had the highest foreign debts; and these states include Lagos, Kaduna, Edo, Cross River, and Bauchi.
Between the 2019 and 2020 period; Lagos, Kaduna, Anambra, Benue, and Zamfara states accounted for over half of the “net year-on-year subnational debt increase of N472.63bn for all the states”, accruing a combined debt of N300.7 billion or 63.63 percent, the report said.
READ ALSO: International Investors Still Interested In Nigeria’s Economy – DMO
It added that Rivers State had the highest fiscal performance, noting that the “fiscal fundamentals” of the state were “prudently managed” when compared to what was observed in other states.
The report said, “In the overall ranking, two states – Ebonyi and Kebbi – made it as new entrants to the top 5 category.
“This was driven largely by growth in both states’ IGR as recorded by the NBS. Ebonyi state grew its IGR by 82.3% from N7.5bn in 2019 to N13.6bn in 2020, while Kebbi state grew its revenue by 87.02% from N7.4bn in 2019 to N13.8bn in 2020. Meanwhile, Ogun state (now 19th) and Kano state (now 22nd), dropped out of the top 5 category due to a sharp decline in their IGR in 2020.”
The report stated that only five states doubled down on infrastructural investments, and they include Ebonyi, Rivers, Anambra, Cross River, and Kaduna states, noting that the foregoing states spent more on capital expenditure than on operating expenses.
“These states appear at the top of the ‘Index D’ ranking. Nineteen states, including eight oil-producing states, saw a year-on-year decline in their capital expenditure, while seventeen states were still able to improve their investment in capital expenditure, from 2019 levels despite fiscal constraints induced by COVID-19,” it said.
