Proshare Confidential | |
Proshare Confidential | |
7591 VIEWS | |
![]() |
Wednesday, November
08, 2017 3:03PM / Proshare Research
Download
PDF Here
The
dip in oil price coupled with relatively low production led to erosion in government
revenue. This dislocation exposed the weakness in Nigeria’s revenue pool.
Interestingly, these structural fault lines rubbed on the states, as they had
increased their debt levels, just like the Federal Government while the boom
was on. Thus, the high dependency ratio on statutory allocation and weak
internal generated revenue became inevitable.
The
anti-clockwise movement in the cycle left the finances of states hard pressed,
thereby leading to an automatic fall in consumption. Certainly states are
limited with respect to fiscal multipliers, as they are not totally risk
free. High oil prices had masked both the weak productive level of many
states and the low taxable population. At the same time it brought to
public consciousness, the size of total debt held by states.
Taking
a clinical view at the productive level of each state have become necessary, so
as to determine the productive capacity of each state of the federation.
Moreover, it gives an insight on how resources are managed by each state over
the years. A study of the size of public debt of each states and the
trajectory of such debt is carried out in this edition of our Proshare
Confidential Report.
In
this edition, the debt of individual states is weighed against their level of
productivity, as a measure of their fiscal sustainability. It also determines
the chunk of total debt held by states to the aggregate credit over a 5 year
period. Even though states are not totally risk free, they still enjoy
preference over corporates on the risk ladder.
We
also studied the external debt of states both prior to devaluation and post
devaluation, to ascertain the needed hint on the direction and distribution of
total external debt among states.
Download
PDF Here
As
a follow up to the study, projected revenue of each states and their
composition is made available. Thus it allows the study determine:
Related News