The burden of foreign and local debts has become a major challenge for the new governors as well as those serving their second term in office, Blueprint has reliably gathered.
Although most of the new governors are yet to officially come up to terms with the huge debts they met on assumption of office, sources close to some of them said from the little information available, the task might be daunting in the next four years.
Of all the first-term governors as well as their re-elected colleagues, Babajide Sanwo-Olu of Lagos state has the highest debt burden of N1, 043,758,190,703.60 trillion to contend with.
The figure forms about twenty percent of the total debts owed by the 36 states and the Federal Capital Territory (FCT) put at N5.376 trillion in 2018.
A report by Economic Confidential says Lagos leads the pack with N513, 514,416,769.20 as external debt and N 530,243,773,934.40 as domestic debt.
Some of the debt-ridden states where new governors are calling the shot are; Bauchi, N140.6 billion, Gombe, N76.9 billion, Imo, N120.2 billion, Zamfara, 71.9billion and Kwara N76.6 billion.
According to Economic Confidential researchers on the Annual High Indebted States (AHIS) on External and Domestic Debts as of 2018, “the amount owed by Lagos state represents about twenty (20) percent of the total debts owed by the 36 states and the Federal Capital Territory (FCT) which is N5.376 trillion in 2018.”
The recently published report detailed each states’ revenue generation profile in comparison to their federal allocations, while concluding that many states cannot survive without federation allocations.
Other states listed as highly indebted include Edo, Kaduna, Cross River and Bauchi.
“Among the front runners in the highly indebted states for the external debt stock include Edo, Kaduna, Cross River and Bauchi with $276.25m (N99.45bn), $227.25m (N81.81bn), $188.77m (N67.95bn), and $133.93m (N48.21bn) respectively.
“Investigations further reveal that among the first five highly indebted states in the local debt stock saw Lagos emerging tops with N530.243 billion, followed by Delta state with N228.805 billion, Rivers with N225.592 billion, Akwa Ibom state with N198.663 billion and Cross River with N167.955 billion.
“Outside Lagos state that is leading the pack, Rivers state is second with N253.772 billion, Delta comes to third position with N251.589 billion, followed by Cross River in the fourth position with N235.914 billion and the fifth position was grabbed by Akwa Ibom with N215.099 billion,” the ranking shows.
The ranking also revealed the five states that made the list of least indebted states in the external debt stock.
I left N11bn in Bauchi govt coffers – ex-Gov
Ex-Bauchi gov speaks
Meanwhile, the immediate past Governor of Bauchi state, Mohammed Abubakar, has refuted the allegation that his government left behind a debt of N137 billion to the new administration.
Speaking through his media aide Sunday, Ali M. Ali, the former governor said the statement attributed to Transition Committee Chairman, Senator Adamu Gumba, that the immediate past administration bequeathed a debt profile of N137billion was incorrect.
“He also revealed that the previous government inherited N98billion from the former government of Malam Isa Yuguda in 2015.He finally concluded that the out gone government left behind N41billion debt. This is incorrect, factually so.
“Throughout the four-year tenure of the former leader, the government didn’t take a single commercial loan. We, however, acknowledge the receipts of various intervention loans from the federal government that totalled N34.6billion.These were concessionary loans by the federal government to, especially states, with heavy financial burden and lean purse.
”All states were beneficiaries except Lagos and Akwa Ibom states. For example, the government benefitted from bailout loan of N8.6 billion; Infrastructure loan- N10billion; CBN CACS Loan – N8 billion and budget support facility loan- N8billion. Collectively these totalled N34.6billion,” he said.
Ali further clarified that the loans were used for the purposes they were meant for, saying Abubakar left N11.6 billion in the state government’s account, being refund of projects undertaken on behalf of the federal government in the state.
“Before its tenure ended on May 29th, the government of Abubakar ensured that the refund was effected despite the machinations of detractors, some of whom are very visible now.”
“At no time was the government of MA Abubakar a spendthrift or engaged in frivolities in the management of very lean resources,” he said.
Nasarawa gov studying the books
In a related development, Nasarawa state Governor Abdullahi Alhaji Sule said his government had started studying the handover note submitted by the previous administration of Umaru Al-Makura to enable him know the actual status of the state treasury inherited.
The governor stated this weekend in Lafia while fielding questions from newsmen.
He said it’s too early to know what is in the state treasury. “As you also know, I just started working on Thursday and we are just studying the books (the committee work),” Sule said.
The governor said he had met with all the permanent secretaries and chairmen of the local government councils for proper briefing on the state of affairs.
“We asked for different information about the state from where they are. I have also started meeting with stakeholders and various agencies in the state, we have not done a lot of work for now. So, it is too early for us to know what exactly is left in the treasury.”
New governors’ concerns
While the new governors were yet to officially pronounce the “tight state of the states’ finances,” sources said the burden posed by the huge debt had become a source of worry and concerns to the new helmsmen.
For instance, a source in Imo Government House, Owerri, said, “the governor is still studying the handover notes, but I can tell you that the little we have seen shows cause for worry. The debt profile as we talk now is between N100 billion and N200 billion even though an official position is yet to be made known.”
Similar concerns were raised in Kwara state where the governor, Abdulrahman Abdulrazaq, held a meeting with some stakeholders on the state of things in the state.
“Yes, there is yet an official position on what the treasury looks like, but the general state of states’ finances, including that of Kwara, is so daunting and disturbing. This is one challenge the governor(s) will have to battle in the next four years.
“For instance, at a meeting with stakeholders sometime last week, the governor bluntly told the meeting that paying minimum wage for now would be difficult. He, however, promised to clear all backlog of salary arrears owed workers. Simply put, Kwara is in a serious financial mess,” said our source.