Rivers, Lagos and Two Other States Tops BudgIT’s 2017 Fiscal Sustainability Index

Rivers, Lagos and Two Other States Tops BudgIT’s 2017 Fiscal Sustainability Index

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fiscal sustainability, naijapr, budgit

 

Rivers, Lagos and Two Other States Tops BudgIT’s 2017 Fiscal Sustainability Index

 

BudgIT, a civic organization with deep interest in transparency and accountability, recently conducted a research to ascertain the overall fiscal position and opportunities at States level. It was discovered that most states are struggling financially but with careful planning, the bad thread could be reversed. On the fiscal performance side, they tried to pair review states based on their internally generated revenue uptake, their debt profile and check if states could meet their recurrent expenditure obligations as presented in their budget plan for 2017.

“We discovered that, only 4 states can meet their recurrent expenditure obligation without resorting to debts, extra-budgetary revenue or grants’’. Atiku Samuel, Research Lead BudgIT

fiscal sustainability, naijapr, budgit
Atiku Samuel

“BudgIT, for the research relied on the recurrent expenditure projections contained on the 2017 budget of states. On the revenue side, Federation Account Allocation Committee(FAAC) revenue for the first seven months and Internally generated revenue figures for 2016 as presented by the National Bureau of Statistics was used to estimate the monthly average revenue of the states’’.

He also said the research was also done to rank states based on different metrics: Lagos, Ogun and Rivers states lead in terms of Internally Generated Revenue uptake while Borno, Jigawa, Kebbi and Katsina were the least performed states in term of nominal internally generated revenue figures.

fiscal sustainability, naijapr, budgit
Guest at the Launch

“It is important to note that Lagos State’s tops the list of states with huge debt profile as her total debt stock rose significantly from N500.8bn in 2014 to N734.7bn in 2016, thus accounting for 24.2% of the total debt stock of all the 36 state governments. Focusing on Domestic debt stock alone, Anambra is the least indebted states as at the end of 2016 while Taraba State’s $21.9m externally debt numbers makes her the least in terms of external debt undertakings”. 

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BudgIT’s 2017 Fiscal Sustainability Index

BudgIT, combining the different fiscal metric and assigning weights including the ability of States to meet Recurrent Expenditure obligations using with their VAT revenue, 13% derivation and Internally generated revenue, the ability of states to sustainably manage their debt profiles using total revenue and state’s’ ability to meet their recurrent expenditure obligations.

fiscal sustainability, naijapr, budgit
Some of the Speakers at the event

Rivers State tops the fiscal sustainability index due to its strong revenue profile, powered by crude oil, its relatively improving internally generated revenue profile and a manageable recurrent expenditure profile. Rivers’ Debt profile stood at N157.2bn at the end of 2016. Lagos’ massive debt and expansive recurrent expenditure profile weighed down on its internally generated revenue performance. Ogun state, despite running a recurrent budget deficit, is up on the fiscal sustainability index due to the rapid growth in its internally generated revenue. However, Ogun’s debt profile is equally increasing, which could weigh in on its performance in future.

Osun trails the overall index. The state’s inability to meet its recurrent expenditure obligations, its heavy debt profile and inefficiency in the collection of internally generated revenue weighed seriously on the state. Kwara’s rapid improvement in its internally generated revenue helps the state’s performance on the index. Also noticeable is the 22.56%, 52.18%, 2.29% and 2.78% fall in the debt profile of Delta, Kebbi, Gombe and Ebonyi states, respectively.

fiscal sustainability, naijapr, budgit
Vishal Gujadhur,
a representation from the Gates Foundation

 

In all, the report concludes that State governments, need to tremendously embrace a prominent level of transparency and accountability, develop workable economic plans, take haircuts — especially on overheads — expand and design innovative policies around tax collection, especially around collection efficiency and cut down on debt accumulation without a concrete repayment plan. It is equally important for states to open its books – despite the challenges as within the bad numbers, economic opportunities abound.

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This Full Report of the State of States was launched on the 19th of October 2017 in Abuja and had dignitaries from major sectors including the Executive Secretary of the Nigeria Investment Promotion Council, NIPC, Yewande Sadiku and a representative of Bill and Melinda Gates Foundation, Vishal Gujadhur they both commended BudgIT for its effort on the state of states report citing such report will enlighten states on how to become sustainable and how they can make good investments in their states.

 

About BudgIT

BudgIT is a civic organisation driven to make the Nigerian budget and public data more understandable and accessible across every literacy span. BudgIT’s innovation within the public circle comes with a creative use of government data by either presenting these in simple tweets, interactive formats or infographic displays. Our primary goal is to use creative technology to intersect civic engagement and institutional reform.

                                                                               

                                                               

                                               

                               

 

 

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