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Lagos, Cross River, 10 Others To Borrow N1.75tn To Fund 2020 Budgets

Lagos, Cross River, 10 Others To Borrow N1.75tn To Fund 2020 Budgets

Despite state governments ’ outstanding debts running into trillions of naira , at least 12 states are planning to borrow fresh N1 . 75tn to fund their 202

Despite state governments ’ outstanding debts running into trillions of naira , at least 12 states are planning to borrow fresh N1 . 75tn to fund their 2020 budgets , according to investigations by Saturday PUNCH .

This comes just as the latest figure from the Debt Management Office showed that the total indebtedness of the 36 states of the federation stood at N5 , 132 , 521 , 328 , 206 as of June 2019

The 12 states that are planning to borrow N1 . 75tn to fund their budgets are Lagos , Cross River , Imo , Taraba, Benue , Abia , Akwa Ibom , Plateau , Bauchi , Enugu, Katsina and Oyo .
The 12 states have projected budgets of N4 . 58tn as their appropriation bills for the fiscal year .

Lagos , which has the highest budget of N1 . 168 tn for 2020 fiscal year, is planning to borrow N97 . 5 bn to fund the budget , following an estimated revenue of N1 . 07tn .
Cross River State, which has the second -highest budget of N1 . 1 tn , will be grappling with a budget deficit of N979 . 84 bn , which it hopes to raise through “ intellectual money . ”
The total revenue that will accrue to the state was put at N120 . 32bn , leaving a deficit of N979 . 84 bn .

Speaking to Saturday PUNCH on how the government will fund the huge deficit , the Special Adviser Media and Publicity to Governor Ben Ayade , Mr Christian Ita , said , “ We will use intellectual money to fill the void. Most states budget without making room for direct foreign investment. They are never captured in the budget.

The Enugu State government said it would fund the 2020 budget deficit of N32 . 8 bn through loans .

Governor Ifeanyi Ugwuanyi had presented a N169 . 55 bn budget appropriation bill for the year 2020 to the state Assembly which has passed it into law .

The budget is expected to be funded from estimated Independent Revenue totalling N119 . 88 bn , which includes Internally Generated Revenue , federal allocation or statutory allocation . The state expects N8 . 25bn in grants to fund the budget . The expected total capital receipt was put at N136 . 72 bn .

A breakdown of the expected revenue includes an open balance of N26. 2 bn ; statutory allocation of N65 . 25 bn , while the Independent Revenue is N28. 43bn .

But the state Commissioner for Budget and Planning , Mr David Ugwunta , told one of our correspondents on Friday that the state would fund the 2020 budget deficit through loans .

Ugwunta said,

“ We are taking a loan of N30 bn and that loan will fund the deficit . There are domestic loans / borrowing of N32 bn . We have international loans of N9 . 42bn . Those borrowings offset the deficit . ”

He , however , said there were other capital receipts from grants , saying , “ So when you take out those funds , the balance is the deficit .

There is a grant of about N6 . 15bn and another capital receipt of about N2 . 1 bn . ”
The Benue State’ s budget of N189 . 48bn will have a deficit of N96bn , according to information made available.

The draft 2020 budget was premised on an exchange rate of N305 to $ 1 with a crude oil production estimate of 2 . 18 million barrels per day and the crude oil price estimate of $ 55 per barrel .

The state government ’ s share of disbursements from the Federation Accounts Allocation Committee was put at N42. 76 bn , followed by independent revenue of N31 . 88bn and Value Added Tax of N13 . 33bn .

Governor Samuel Ortom said the budget was not always funded with one source , but through various sources , including IGR , which is one of the major sources of budget funding , as well as federal allocations and investments of the state, including loans and grants .

The Chief Press Secretary to Governor Samuel Ortom, Mr Terver Akase , said the state would resort to investment and loan to fund the budget .

He said ,

“ We have a partnership with United Nations agencies and others which are other sources of government funding to fund budget . So , the budget does not rely on one source alone more also that we are doing everything possible to improve on internally generated revenue.

“ Therefore , it is not only about borrowing to fund the budget, so , the budget would not only be dependent on loan. We will use other means to finance it other than a loan. Loans are just one source of budget funding .
“ However , if the need arises, the government will borrow to finance other important capital projects . If you want to take a bond , for instance , you need that bond for a specific project you go for it , ” he said .

Also , the Taraba State Government is set to borrow more to fund this year’ s budget , according to checks by Saturday PUNCH .
The state government had on December 19, 2019 , presented a budget estimate of N213 . 63 bn to the state House of Assembly for deliberation and passage.

But checks by Saturday PUNCH revealed a deficit of N84 . 85bn as the total revenue, aides and grants in the 2020 budget were put at N128 . 77bn .
Specifically, Governor Darius Ishaku had during the budget presentation said his administration planned a domestic borrowing of N77. 5 bn and an external loan of N7 . 3 bn to service the budget .

When contacted on how the state intended to cover up the deficit , the Senior Special Assistant to the Governor on Media and Publicity , Mr Bala Dan – Abu , said economic experts were already working on how to address the deficit in the budget .
In Oyo , the state government is expected to borrow about N28bn to fund the budget . However , the state indicated on Friday that it would de -emphasise the use of a loan to fund its budget deficit in the current year .

Rather than indulge in the loan as being done in the past , the government said it would explore less strenuous means to fund the 2020 budget of N213 . 78bn which has a deficit standing of 10 per cent of the total budget .
The state Commissioner for Budget and Economic Planning , Mr Adeniyi Farinto , who spoke with one of our correspondents through the Permanent Secretary in the ministry , Mofoluke Adeniyi , said , “ The budget size for the year 2020 is N213 . 78 bn . The budget deficit is just about 10 per cent of the total budget for the current year.

“ The budget is going to be heavily financed through grants . We are going to rely on grants and de -emphasise on loan as much as practicable . Of the total budget for the year 2020 , 48 per cent goes to capital expenditure while 52 per cent is for recurrent. ”

In Katsina , the state projected N249 . 46bn for 2020 , whereas the total revenue expected is N185 . 34bn .
Governor Aminu Masari said during his budget presentation to the members of the state House of Assembly that the budget would be financed through IGR of N12. 24 bn ; other sources of revenue are N34. 09bn and N139 bn receivables from the federation account .

Efforts to speak with Masari ’ s Director -General on Media , Abdu Labaran , to provide further details on the issue were unsuccessful as he did not answer his calls.

The state Commissioner for Finance , Kasim Mutalab , and top officials in his ministry were also said to be attending an official assignment at the Government House as of press time .

In Bauchi State, the total budget of N167 . 21 bn has a deficit of N37. 48 bn . According to a document obtained by one of our correspondents , the budget has an opening balance of N400 m , statutory allocation /excess crude , N57 . 09bn ; VAT , N18 . 77bn ; Independent Revenue , N4 . 79 bn ; aids and grants , N21. 86bn ; and capital receipts of N17bn which culminates to N129 . 75 bn .

The state Commissioner for Budget and Economic Planning , Dr Aminu Gamawa, could not be reached for his comment as he did not answer calls to his phone as of press time .

36 states’ debts hit N 5 . 132 tn
Meanwhile , the total indebtedness of the 36 states of the federation stood at N5 , 132 , 521 , 328 , 206 as of June 2019 , the latest figure from the website of the Debt Management Office showed .
This comprises external loan of N1 , 298 , 497 , 245 , 300 and domestic debt of N3 , 834 , 024 , 082 , 906 . 80 .

Lagos State leads the debtor states with a total of N479 , 047 , 606 , 006 . 32 . Rivers State comes second with N266 , 936 , 225 , 793 . 65. However , the DMO statistics show that the Rivers State debt figure was compiled as of December 30 , 2018 .

Delta State owed N233 , 564 , 158 , 885 . 47 and Akwa Ibom State owed N206 , 414 , 472 , 059 . 83 .
Others are Abia State with a total of N68 , 003 , 077 , 437 . 81 ; Adamawa State, N95 , 219 , 782 , 086 . 14 ; Anambra State, N33 , 431 , 158 , 600 . 07 ( as at March 31 , 2019 ); Bauchi , N97, 502 , 601 , 723 . 17; while Bayelsa State owed N133 , 339 , 375 , 587 . 91 as at March 31, 2019 .

Benue State ’ s domestic debt profile as at March 31 , 2019 stood at N96 , 905 , 502 , 591 . 02 ; Borno State owed N86 , 861 , 555 , 192 . 24 ; Cross River N168 , 819 , 230 , 129 . 37 ; Ebonyi State had N42 , 053 , 162 , 874 . 44 ; Edo State N84002, 644 , 092 . 96; and Ekiti State N86 , 905 , 756 , 443 . 45 .

Enugu State owed N60, 151 , 622 , 506 . 87; Gombe State , N79 , 634 , 209 , 227 . 24 ; Imo State, N148 , 598 , 063 , 157 . 77 ; Jigawa State, N38673, 319 , 242 . 36; Kaduna State owed N97 , 264 , 280 , 664 . 14 ; Kano State, N117 , 339 , 436 , 693 . 47 ; Katsina State owed N66 , 164 , 163 , 901 . 64 ; and Kebbi State, N59 , 598 , 378 , 104 . 63 .

Kogi State owed N105 , 135 , 912 , 916 . 65; Kwara State, N61, 335 , 531 , 821 . 69; Nasarawa State N89, 953 , 619 , 684 . 92; Niger State, N41 , 792 , 519 , 380 . 33 ; Ogun State, N95 , 174 , 172 , 678 . 30 ; Ondo State , N55, 524 , 221 , 404 . 56 ; Osun State, N144 , 804 , 503 , 035 . 23 and Oyo State, N99 , 358 , 565 , 798 . 52 .

Plateau State owed N98, 356 , 193 , 262 . 55; Sokoto State, N33, 509 , 692 , 266 . 79; Taraba State, , N73, 466 , 840 , 201 . 25; Yobe State, N27 , 465 , 573 , 418 . 77 ; and Zamfara State, N61 , 716954 , 035 . 15.

Lagos State is also top on the list of debtor states in external debt with $ 1 , 421 , 234 , 576 . 50 as at June 30, 2019 ; Edo State owed $ 77 , 735 , 972 . 77 and Kaduna State, $ 223 , 760 , 252 . 12 .

Abia State owed $ 98, 028 , 292 . 33; Adamawa State, $ 100 , 613 , 674 . 40; Akwa Ibom State, $ 44 , 935 , 625 . 88 ; Anambra State, $ 111 , 783 , 998 . 80; Bauchi State, $ 133 , 705 , 364 . 22; Bayelsa State, $ 56 , 154 , 690 . 84 ; Benue State, $ 33 , 936 , 861 . 92 ; and Borno State, $ 21 , 313 , 198 . 49 .

Cross River State owed $ 192 , 730 , 721 . 41; Delta State, $ 62 , 952 , 056 . 49 ; Ebonyi State, $ 76 , 044 , 993 . 97 ; Ekiti State, $ 104 , 771 , 792 . 18; Enugu State, $ 125 , 351 , 839 . 26; Gombe State, $ 36 , 960 , 036 . 41 and Imo State with a debt of $ 68 , 812 , 739 . 83 .

Jigawa State owed $ 31 , 550 , 317 . 67 ; Kano State owed $ 62, 219720 . 77 ; Katsina State, $ 61 , 082 , 288 . 27 ; Kebbi State, $ 44, 918 , 042 . 07; Kogi State, $ 31, 111 , 476 . 95; Kwara State, $ 47 , 961 , 939 . 95 ; Nasarawa State, $ 63 , 768 , 296 . 18 ; Niger State , $ 65, 190 , 776 . 88, Ogun State, $ 102 , 154 , 285 . 23 ; Ondo State, $ 78 , 980 , 779 . 09 ; Osun State, $ 97, 496 , 310 . 66 and Oyo State, $ 136 , 531 , 758 . 12.

Plateau State owed $ 28 , 491 , 926 . 97 , Rivers State, $ 80 , 915 , 343 . 53 ; Sokoto State, $ 36 , 594 , 539 . 81 ; Taraba State, $ 21 , 316 , 143 . 05 ; Yobe State’ s external debt stood at $ 27, 242 , 586 . 26 and Zamfara State, $ 33 , 101 , 729 . 89 .

28 states budget N 8 . 25tn for 2020
Meanwhile , at least 28 states have budgeted N8 . 25tn for capital and recurrent for 2020 .
The states are Lagos , Rivers , Ebonyi , Osun , Enugu, Oyo , Plateau , Adamawa , Kwara , Akwa Ibom , Ondo , Delta , Abia , Katsina , Benue , Cross River , Lagos , Sokoto , Ogun , Taraba, Ekiti , Imo , Kaduna , Kano , Zamfara , Bauchi , Niger , and Yobe for the fiscal year.

Rivers State Governor Nyesom Wike said the 2020 budget of N530 . 81bn was for the sustained development of the state. The Rivers State 2020 budget has a total recurrent expenditure of N156 . 659 bn , while capital expenditure is N374 . 15bn .

Governor Dapo Abiodun of Ogun State also signed the state’ s N449 . 97 bn 2020 appropriation bill into law . Giving the breakdown of the budget , the governor said N269 . 132 bn , representing 60. 31 per cent , was proposed for capital projects , while N180 . 842 bn or 39 . 69 per cent was set aside for recurrent expenditure .

The Ebonyi State Governor David Umahi budgeted N178 . 14bn for the 2020 fiscal year. The recurrent expenditure of N46 . 08bn represents 25 . 87 per cent of the total budget , while capital expenditure of N132 . 07 bn , representing 74 . 13 per cent of the total budget .

In Osun State, Governor Adegboyega Oyetola earmarked N119 . 55bn as the 2020 appropriation bill. Recurrent expenditure was put at N57. 674 bn , while the capital expenditure was put at N61 . 875 bn .

Source:- Punchng

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