Debt Servicing: State Governors Spent N3.6bn in January

• Debt Servicing: State Governors Spent N3.6bn in January

State Governors spent a combined N3.6 billion servicing external debts in the month of January.

This amount represents 1.8 percent of their total January allocation of N206.75 billion.

A breakdown shows Lagos led with N1.23 billion. Followed by Oyo State with N321.05m; Rivers, N224.3m; Kaduna, N212.72m; Bauchi, N122.54m; Cross River, N114.17m and Katsina, N101.95m.

Similarly, the sum of N49.08m was used by Abia State to service its debt; Adamawa, N47.88m; Akwa Ibom, N49.99m; Anambra, N48.79m; Bayelsa, N37.12m; Benue, N25.85m; Borno, N16.98m; Delta, N27.21m and Ebonyi, N43.68m.

In the same vein, the analysis of the allocation showed that Edo spent N78.96m on debt servicing; Ekiti, N86.49m; Enugu, N66.5m; Gombe, N33.51m; Imo, N52.49m; Jigawa, N28.35m and Kano, N68.65m.

Also, Kebbi incurred N40.52m on debt service; Kogi, N28.758m; Kwara N37.14m; Nasarawa, N34.22m; Niger N43.8m; Ogun, N65.96m; Ondo, N51.25m; Osun, N104.63m; Plateau, N21.79m; Sokoto, N37.26m; Taraba, N22.65m; Yobe, N33.98m and Zamfara, N28.43m.

Mr Godwin Eohoi, the Registrar, Chartered Institute of Finance and Control of Nigeria, advised state governors to exercise caution on borrowing to avoid a debt crisis.

He said: “Currently, at the federal level, what we are still doing is debt servicing using a huge proportion of the annual budget to pay debt. That is serious because the money that you would have used for other things is now being used to pay debt.

“If you look at the sub-national level, their debt is mounting and with such mounting debts, the amount required to service them would be quite huge. I think we should not even accumulate further debt beyond what we currently owe.”

Dr Chijioke Ekechukwu, a former Director-General, Abuja Chamber of Commerce and Industry, also explained that the rising debt level portended danger for the economy.

“It is expected that the debt profile of a country would rise considering the fact that we have a deficit budget at both federal and state levels. So, it is expected that they would need to continue borrowing to meet the increased size of the deficit.

“However, these borrowings portend danger for the economy because our debt profile is rising and we do not know when we are going to scale it down,” he added.