Top News from Nigeria, Africa and the world

Debt exceeds revenue in 36 states, FCT, says FRC

Get real time updates directly on you device, subscribe now.

All the 36 states of the federation contravened the guidelines of the Debt Management Office by contracting debts exceeding their 12-month revenues, the Fiscal Responsibility Commission has said.

According to the DMO guidelines on borrowing, no state should have outstanding loans that are more than 50 per cent of their total revenues in the previous 12 months.

- Advertisement -

However, statistics provided by the FRC in its 2018 Annual Report obtained on Wednesday showed that all the states had debts more than 50 per cent of their 12-month revenues.

The report showed that a state had debt to revenue ratios as high as 781 per cent while some had lower debt to revenue ratios.

However, the FRC argued that none of the states could be said to have overborrowed.

It hinged its argument on the fact that the President of the country that was supposed to set the borrowing limit for the states, according to the FRC Act, had not set any limit.

- Advertisement -

Nonetheless, going by the limit set by the foremost debt management agency in the country, no state is within the limit as they have all gone beyond the provided set order.

Lagos led the rest of the states. It had a net revenue of N119.02bn, with a total debt of N968.16bn.

This left the state with a debt to revenue ratio of 813.41 per cent. It also means that the state had gone beyond the DMO limit by 763.41 per cent.

Lagos was quickly followed by Osun State with a debt to revenue ratio of 781.71 per cent. While it had a net revenue of N22.84bn, its total public debt stood at N178.52bn.

- Advertisement -

This means that the state had a debt to revenue ratio of 781.71 per cent and had gone beyond the limit set by the DMO by 731.71 per cent.

Other top states in terms of high debt to revenue ratios include Cross River, Ekiti, Ogun, Plateau, Edo, Bauchi, Adamawa, Kaduna, Nasarawa, Imo and Oyo states.

The Federal Capital Territory Administration also made the list of top subnational governments with high debt to revenue ratio.

Cross River State had a net revenue of N36.95bn, a debt of N225.91bn, a debt to revenue ratio of 611.31 per cent.

It therefore had gone beyond the limit by 561.31 per cent.

Ogun State had a net revenue of N39.64bn, a debt of N130.42bn and a debt to revenue ratio of 328.97 per cent.

The state, therefore, had passed the limit set by the DMO by 278.97 per cent.

For Plateau State, the revenue stood at N43.89bn while the debt stood at N109.23bn.

The debt to revenue ratio stood at 248.9 per cent while it had gone beyond the limit by 198.9 per cent.

Edo had a net revenue of N69.17bn, a total debt of N171.63bn and a debt to revenue ratio of 248.13 per cent. It overstepped the limit by 198.13 per cent.

Get real time updates directly on you device, subscribe now.

Comments
Loading...