EconomyNewsSpecial Report

Fiscal Strength: BudgIT Places Rivers State on the Prime Spot

By Barnabas Esiet.

The 2020 edition of the annual States of States report by BudgIT, has seen Rivers State occupying the top position on the fiscal sustainability chart.

BudgIT,  a civic advocacy organization that uses technology to intersect citizen-engagement with improved governance, also placed Anambra and Lagos states on the second and third spots in the latest report titled “Fiscal Sustainability and Epidemic Preparedness Financing at the State level’’.

On the flip side, Bayelsa, Osun, Ekiti and Plateau states ranked the lowest among the States that are not fiscally sustainable.

In a statement, the Advocacy Group said “without a doubt, soaring debt burden, imprudent fiscal planning, and nearly a decade of misplaced expenditure priorities have beaten a clear path to fiscal crisis for many Nigerian states.”

According to the report, 13 states were unable to generate enough revenue to fund their recurrent expenditure commitments alongside loan obligations due in 2019. “The worst hit of these 13 states are – Oyo, Kogi, Osun and Ekiti States while the other states on this pendulum are Plateau, Adamawa, Bauchi, Gombe, Cross River, Benue, Taraba and Abia.” The statement read.

BudgIT noted that eight of the remaining 23 states, that can meet recurrent expenditure and loan repayment schedules, had really low excess revenue(less than N6bn), such that that they had to borrow heavily to fund their capital projects. The worst hit states are Zamfara, Ondo and Kwara which had excess of N782.45m, N788.22m and N1.48bn, in that order.

Based on BudgIT’s fiscal analysis of the States’ 2019 financial statements, only five of them ; Rivers, Kaduna, Akwa Ibom, Ebonyi and Kebbi States, spent more on capital expenditure than recurrent obligations compared with 31 States that prioritized recurrent expenditure over capital projects.

According to BudgIT’s Research Lead, Abel Akeni, debt obligations of all 36 states increased by 162.87% (N3.34tn), from N2.05tn in 2014 to N5.39tn in 2019, with 10 states accounting for approximately half of the increase, seven of the states are from the South while three are from the North.” He noted.

“There is still a need to put systems in place for aggressive IGR growth within the subnational economies, especially as falling crude oil prices, OPEC production cuts and other COVID-19 induced headwinds are set to impact Federal Allocations over the next two years.” BudgIT’s Principal Lead, Gabriel Okeowo said.

The State of States report is BudgIT’s trademark analysis that provides policy makers with robust insights on ways to implement financial and institutional reforms that will improve states’ fiscal performance and sustainability level.


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