Due to negative exposure to exchange rate volatility, Lagos, Kaduna, Edo, Cross River and Bauchi topped stated highest foreign debt.
Naija News reports that this was disclosed by BudgIT Nigeria in its #StateofStates2021 report.
BudgIT’s report disclosed that Rivers state, once again, topped the overall 2021 Fiscal Performance Ranking, indicating that the fiscal fundamentals of the Governor Nyesom Wike-led state, compared to others in the country, are more prudently managed.
According to the report, two states – Ebonyi and Kebbi – made it as new entrants to the top 5 category in the overall ranking.
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.
According the BudgIT, only three (3) states in the country could meet their operating expenses obligations with a combination of their IGR and Value Added Tax (VAT) as measured in our ‘Index A’ ranking; these states are Lagos, Rivers, and Anambra.
Cumulatively, the 36 states total debt burden increased by N472.63bn (or 8.78%) from N5.39tn in 2019 to N5.86tn in 2020.
This, according to the report, was driven largely by exchange rate volatility which saw the value of the naira jump from N305.9/$1 in 2019 to N380/$1 as of December 31 2020.
Furthermore, five (5) states accounted for more than half (that is 63.63% or N300.7bn) of the net year-on-year subnational debt increase of N472.63bn for all the states between 2019 and 2020: the states are Lagos, Kaduna, Anambra, Benue and Zamfara.
Based on each state’s 2020 revenue, 5 states prioritized investment in infrastructure by spending more on capital expenditure than operating expenses. The states are Ebonyi, Rivers, Anambra and Cross River states in the south and Kaduna state in the north. 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.
The results were better for states that had introduced reforms to block leakages, due to the existence of “ghost workers” and other forms of payroll fraud. About 24 states and 27 states respectively, had introduced “Biometric” and “BVN” use in payroll management”.
Source: Naija News