Wednesday, March
28, 2018 /09:20 AM / FBNQuest
Research
The
external debt of the state governments and the FCT amounted to US$4.12bn at
end-December and, being necessarily guaranteed by the FGN, is included in the
latter’s total obligations of US$18.91bn. The total increased by US$550m over
12 months.
Lagos
is comfortably the largest debtor (see chart), which is to be expected for the
state with the highest internally generated revenue (IGR) and best credit
rating. Anybody unfamiliar with the state’s fiscal and investment credentials
has only to refer to a positive piece this week in the UK’s Financial Times.
The entire stock of debt in question is
concessional, and indeed multilateral with the exception of loans totaling
US$224m from the agence française de développement (AFD, the French state
development bank).
The decline in monthly distributions by the
FAAC over three years has exposed the fiscal weaknesses of the vast majority of
the 36 states. The reason, of course, has been the fall in oil revenues for
distribution. The FGN, anxious to stem rising arrears in salary and pension
payments by the states, has responded with five debt relief packages for the
states since mid-2015.
The domestic bank borrowings of the states
reached N3.35trn in 2017. These are not guaranteed by the FGN although the
states benefited from its N575bn restructuring programme to convert their bank
borrowings into 20-year federal bonds. Other than Lagos three times, there have
been no new bond issues by states since May 2015.
Provisional data from the National Bureau
of Statistics point to a welcome 12% increase in states’ IGR last year, to
N931bn. All but five states were able to boost their receipts in 2017. The data
show that Lagos again topped the list comfortably, collecting N334bn in the
year.
Related
News
- Lagos State Has The
Highest Domestic and Foreign Debts as at December 2017 - NBS
- States Generate
N931.23bn as IGR in 2017 - NBS
- Fitch Affirms Nigeria''s
Lagos State at ''B ''; Outlook Negative
- CLI hosts
Environmentalists to restate commitment to Healthier, Safer Lagos
- Cleaner Lagos Initiative
announces Hotlines for Feedback and Enquiries from Residents
- A Rejoinder to the
Omorotionmwan Story on the Obaseki Administration
- States Generate
N149.45bn as IGR in Q3 2017 - NBS
- Rivers Now the State of
States
- The Uphill Battle for
IGR Collection
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