BudgIT, a social advocacy group, in a recent analysis of the fiscal condition of states, says Nigerian state governments lack sustainable fiscal plan. It noted that “it was critical that state governments embrace a high level of transparency and accountability, develop workable economic plans, take haircuts, especially on overheads, expand their internally generated revenue (IGR) base, and cut down on debt accumulation that does not have a concrete repayment plan.
With the NBS report placing Lagos as the state with the highest foreign and domestic debt profile among the thirty-six states plus FCT, the country’s acclaimed centre for excellence accounted for 34.17 percent of the country’s foreign debts.
Lagos also accounted for 15 percent (the highest) of total debt stock of states at N517 billion followed by Delta (N223 billion), Rivers (N191 billion), Akwa Ibom (N179 billion), and Osun (N136 billion), making up the top five indebted states.
While the states with lowest debts are Anambra (N2.6 billion), Sokoto (N25 billion), Yobe (N27 billion), Kastina (N31 billion), with Ebonyi and Jigawa States having N34 billion each.
According to BudgIT, the huge debt profile of Lagos made it drop from 2nd to 4th place on the fiscal sustainability index, notwithstanding the state’s economic advantage in terms of internally generated revenue.
When compared to many of its peers, IGR in Lagos is relatively high with a projection of earnings to be a little over N300 billion for 2018, however, the state’s overheads cost and debt, which is unusually elevated is weighing down on its revenue and its performance on the 2018 fiscal sustainability index, BudgIT said.
BudgIT also expressed extreme concerned with the poor fiscal management thinking in Cross River with its bogus budget plan of N1.3 trillion. The advocacy group said this severely weighed the state down on the index, Research also showed that Osun State is not out of the woods as it still ranks 35 out of the 36 states.
Consequently, it advised state governments on the need to link future borrowing to sustainable projects, which can pay back the capital cost of its current loans and improve the overall income profile of the state.
BudgIT advised economic planners at the state level to improve tax collection efficiencies and realign budgeting with statewide plans.
The group proffered “reduction in state’s operating costs, including significantly slashing its unreasonable overheads bill while freeing up more spending for social and economic infrastructure.
It also encouraged states to engage in significant investment needed to improve the overall economic performance at the state level, which invariably could create jobs that feed into states’ internally generated revenue, adding that “improved spending is also critical for value-added tax revenue.”
Urging states to explore export opportunities in aquaculture, agriculture, manufacturing, trade, logistics and tourism abound across states, BudgIT advised state governments to shun the supposed lack of rigour and foresight to explore these opportunities.
Relatedly, Celestine Okeke, lead partner at Sustainable Entrepreneurship And Economic Development Initiative (SEEDi) urged the indigenes of states in the country to begin setting mandates for their respective government and not the government setting mandates for the citizens.
He said, “as the next elections are coming up, state indigenes must know where they are lacking and be ready to present a list of needs to their governments as well as be ready to follow up on these demands.”
Explaining that most of the lackluster attitude of Nigerians lead to the government behaving in a manner that seems convenient rather than doing the needful, Okeke opined that a disconnect of the citizens with their government will not bring the desired result necessary to change the face of governance in the country.
He thus urged Nigerian citizens to take more keen interest in the affairs of governance, and encouraged youths to be interested in administration and governance not just at the state level, but at all levels including levels such as the community and schools.