A budget-based organisation, BudgIT, has cautioned state governments to desist from accumulating debts, especially from external loaners.
BudgIT’s Lead Presenter, Mr Oluseun Onigbinde, who raised this concern while presenting the group’s 2017 State of States report on Thursday in Abuja, said exchange rates made it difficult to service such loans.
Onigbinde said that BudgIT aimed at making the Nigerian budget and public data more understandable and accessible across every literacy span.
He said that the rising debt profile of states had become worrisome; hence the need for states to boost their Internally Generated Revenue.
“State governments are indebted to Nigerian banks and investors; shackled with by huge repayment debts borrowed against higher oil prices.
“Total debt stock of Nigerian states has increased significantly from the 2012 level of N1.79tn to N2.12tn in 2014.
“With increased inability to meet recurrent expenditure obligations and increased pressure, most states resort to more debt uptake; total debt profile of the states in 2015 and 2016 was N3.03tn and N3.89tn respectively.
“The debt profile of states is an understanding that their revenue has been poor and they have to resort loans and the statutory funds which the Federal Government provides.
“It is important that states begin to watch this; especially external debt; exchange debt risk can be a problem and some states like Lagos are facing it now and it can escalate to other states.”
Onigbinde said that the only way forward was for states to raise their IGR, bring in investments, and become more efficient in the use of public resources.
He said that loans should be channelled to projects that could bring about sustainable development and impact on IGR such as building roads in industrial estate among others.
The lead presenter advised states to reduce their operational costs and free up more spending on social infrastructure.
He urged states to harness the opportunities that abound in aquaculture-agriculture manufacturing, trade, logistics and tourism.
