Many Nigerian states will have to rev up their internally generated income and cut both expenditure and debt, to survive the next few years, a new Fiscal Sustainability Index published by BudgIT Nigeria, a budget transparency advocacy group has said.
The report styled ‘State of the States,’ ranks all the 36 states in Nigeria, with Rivers, Lagos, Ogun and Kano the leaders.
Ekiti and neighbouring Osun emerge at the bottom of the ranking, joined by Gombe and Plateau to make the last four.
Rivers topped Lagos, because of its healthier financial profile: lower debt, increase in IGR and ability to pay its bills.
Although Lagos state leads the rest in IGR, accounting for 37 per cent of all the money collected by the states, it is also bogged down by huge debt, over N734 billion as at December 2016, the report said. The debt burden is more than 25 per cent of the entire debt owed by the 35 states, which now stands at N3.89trillion as at December last year.
A sign of the debt pressure on Lagos state manifested in the first six months of this year, where the state only got N491million on the average from the Federal Government, as it has signed off the bulk of its dues to creditors and bond holders.
“State governments are confronted by rapidly rising budget deficits as they struggle to pay salaries and meet contractual obligations and overheads due to a dip in oil price from its peak price of about $140 per barrel to about $56 per barrel,” the report said..
“Over the last few months, state governments have been devising policy changes with strong focus on improving internally generated revenue and reining in expenditure,” it added.