States Jerk up Deficit Spending by 90% to N800bn
The 36 state governments are set to incur about N800 billion budget deficit in 2021, representing a 90 per cent increase from the N420 billion recorded in 2020.
Analysis of the approved budgets for the 36 states show total proposed revenue of N7.05 trillion as against total proposed expenditure of N7.85 trillion, translating to a budget deficit of N800 billion.
In 2020, the states had N5.02 trillion as budgeted expenditure with N4.6 trillion as budgeted revenue, thus deficit of N420 billion.
Consequently, the N800 billion proposed budget deficit for 2021 represents a 90 per cent increase when compared with the N420 billion proposed budget deficit of the states in 2020.
Budget 2021 Breakdown
Further analysis of the states proposed budget showed dominance of capital expenditure which accounted for 54.8 percent of the total proposed budget while recurrent expenditure accounted for 44.6 per cent or N3.5 trillion.
Further analysis also showed that the proposed 2021 budget of N7.85 trillion is dominated by five states which accounted for 20 percent of the total states’ budget.
The five states are: Lagos (N1.15 trillion), Rivers (N448 billion), Akwa Ibom (N435 billion), Imo (N346 billion) and Ogun (N339 billion).
On the other side are the five states with the lowest budget, which accounted for 7.1 percent or N562.2 billion of the total proposed budget.
The states are Yobe (N106.9 billion), Ekiti (N109.6 billion), Osun (N109.8 billion), Nassarawa (N112.9 billion) and Ebonyi (N123 billion).
Revenue profile
Analysis also showed that 52 percent or N3.39 trillion of the proposed revenue of N7.05 trillion will come from Internally Generated Revenue (IGR) and Federation Account Allocation Committee (FAAC).
According to their approved budgets, the 36 states hope to raise N1.82 trillion from IGR, to complement FAAC receipts of N1.87 trillion.
Five states dominated the proposed revnue of N7.05 trillion for 2021 with 33.6 percent or N2.37 trillion. The states are: Lagos (N962.52 billion), Rivers (N448.6 billion), Delta (N384 billion), Ogun (N320 billion) and Akwa Ibom (N255.03 billion).
On the other hand, the five states at the bottom of the revenue chart accounted for 6.5 per cent or N464.46 billion. The five states are Ebonyi (N64 billion), Enugu (N79.76 billion), Oyo (N102.8 billion), Yobe (N106.9 billion) and Gombe (N111 billion).
In terms of FAAC revenue, Lagos and four other states dominated the chart accounting for 20.8 per cent or N389.88 billion. Lagos state led with N116.78 billion, followed by Katsina (N74 billion), Niger (N71.8 billion) , Bauchi (N68.3 billion) and Ogun (N59 billion).
At the bottom of the FAAC revenue chart are five states which accounted for 9.3 per cent or N174.1 billion. These are Ekiti with N29.4 billion, Ondo (N34.4 billion), Yobe (N35.3 billion) , Akwa Ibom (N36 billion) and Gombe (N39 billion).
States with the highest projected IGR are Lagos (N732.6 billion), Ogun (N119 billion), Jigawa (N51.6 billion), Kaduna (N50.6 billion) and Anambra (N36.6 billion).
States with the lowest 2021 projected IGR are Adamawa (N12 billion), Ebonyi (N12 billion), Kebbi (N12.2 billion), Katsina (N15.6 billion) and Benue (N19.7 billion).
States Deficit Funding Plans
Lagos State said it will finance the proposed deficit of N192.49 billion through external loans of N37.26 billion, internal loans of N55.24 billion and bond issuance of N100 billion this year.
On its part, the Kaduna State government intends to finance its budget deficit through internal grants of N39.99 billion, external grants of N9.2 billion, external loans of N46.9 billion while N1 billion will be generated through sale of government assets worth N1 billion.
On the other hand, Kano State is targeting N6 billion from internal and external loans as well as N33.29 billion from general grants.
Benue State said it will finance its N23.8 billion deficit through a combination of domestic loans and bond issuance.
Akwa Ibom on its part said it will finance its N180.6 billion deficit through internal loans of N40.04 billion, grants of N34 billion. Others are Ecological Fund – N2 billion, Reimbursement from Federal Government on Road and other Infrastructure – N 15 billion, N500 million from Investment Income; Exceptional Income of N 61.105 billion and N1 billion from Stabilization Account.
Anambra State plans to fund its N11 billion deficit through domestic loans at concessionary interest rates. Kogi State however noted that its estimated Capital Receipt is N48.08 comprising internal and external loans, aids and grants.
Abia State also indicated it will finance its N29.68 billion through domestic loans.
