Friday, April 12, 2019 05.50PM / Bukola
Akinyele for Proshare WebTV
A recent report released by the National Bureau of Statistics (NBS) shows that Nigerian States are facing major challenges managing both domestic and foreign debts.
In a recent seminar organised on the outlook of the economy in 2019, Dr Ayodele Teriba pointed out that the high debt of sub-nationals reflects a major problem with domestic liquidity, or what he calls a “liquidity glut”. This refers to the absence of fiscal revenues to cover capital and recurrent annual budget expenditures.
Dr Temitope Oshikoya, another economist, giving perspective on the debt profile of states in Nigeria, said that one major challenge at the sub-national level was the efficient management of debts.
He stressed the need for debts to be utilized for productive ventures that will boost state economies, while decrying the poor management of loans that have been borrowed over the years, which has left a legacy of rolled over or accumulated debts.
Oshikoya attributed the rising debt profile of Nigeria’s sun-nationals to their narrow revenue base.
“Debt in itself is not bad but must be managed efficiently to address critical sectors that can drive economic expansion at the state level” Oshikoya said.
For Domestic Debt; Lagos(South-West) with N530.2bn, Delta (South-South) with N228.8bn and Rivers (South-South) with N225.5bn emerged the top three(3) states with the highest debt profile.
The top ten sub-national debt profile reveals the usual suspects as follows :
· Lagos(South-West) N1.42trn ,
· Edo (South-South) N276.2bn
· Kaduna (South-West) N227.2bn
Top 10 States with Highest External Debt Profile
Nigeria’s foreign and domestic debt currently stands at $25.27bn and N16.63trn respectively.