BEVERLY HILLS, March 08, (THEWILL) – Notwithstanding the grandiose remarks accompanying the governors’ presentation of their 2021 budgets, (“Budget of Blush and Bliss” – Cross River; “Budget of Providence” – Osun; “Budget of Accelerated Recovery” – Kogi; “Budget of Stabilization and Consolidation in a Recession” – Ebonyi; “Budget of Fulfilment and Consolidation” – Bauchi), available data shows that budgets of the 36 states and the Federal Capital Territory (FCT), totaling N8.3 trillion, offer little hope for economic or job growth which are the fundamental purposes of budget. The states are neck-deep in external and domestic debts while alternative revenue sources to Federal Allocation proceeds are lean where they ever exist. Worse, still, the states engage in frivolous spending pattern that points to their choice of profligacy as a cultural necessity while unemployment rate mounts.
Analysis of the N8.3 trillion 2021 budgets of the 36 states’ and the FCT, vis-à-vis their revenue and debt profile, shows little avenues of economic or job growth to enhance the living standards of the people, besides payment of salaries. Revenue-to-budget is low (20.76 per cent), compared to debt-to-budget (69 per cent). That means, almost 70 per cent of the total budget will go into debt servicing if strictly applied. Alternatively, the states are postponing the evil day.
South-East Geo-Political Zone, comprising Abia, Anambra, Ebonyi, Enugu and Imo states has a total budget of N916 billion with Imo recording the highest – N346.16 billion, followed by Enugu N169.84 billion. The Zone’s total revenue is N160.3 billion: Enugu records the highest revenue of N35.95 billion followed by Imo N34.22 billion. Anambra has the highest external debt of $115.8 million (of the Zone’s $428.5 million), followed by Abia $87.15 million. Imo with N158.17 billion has the highest domestic debt in the Zone followed by Abia N89.62 billion. The Zone’s total domestic debt is N411 billion. The territory has average unemployment rate of 27.82 per cent according to the National Bureau of Statistics (NBS).
For the South-South Zone of Akwa Ibom, Bayelsa, Cross River, Delta, Edo and Rivers, the total budget for 2021 is N2.06 trillion with Akwa Ibom and Rivers recording the highest: N456.25 billion and N448.66 billion respectively. The Zone’s total revenue is N504.4 billion with Rivers and Delta recording N139.66 billion and N131.65 billion respectively. Edo and Cross River have the highest external debts of $254.19 million and $172.64 million respectively. Rivers with N266.93 billion has the highest domestic debt, followed by Akwa Ibom N239.20 billion. Average unemployment rate of the Zone is 31 per cent.
The South-West Zone of Ekiti, Lagos, Ogun, Ondo, Osun and Oyo states have a total budget of N2.16 trillion, with Lagos recording the highest – N1.16 trillion, followed by Ogun N338.6 billion. On the revenue side, the total for the Zone is N418.6 billion led by Lagos with N254.54 billion, followed by Oyo N42.59 billion. Lagos also has the highest external debt of $1.26 billion followed by Ogun $97.90 million. Again, Lagos leads in domestic debt of N493.31 billion followed by Ogun N150.08 billion. The Zone’s average unemployment rate is 17.35 per cent – the lowest among the six geo-political zones.
North-Central Zone of Benue, Kogi, Kwara, Nasarawa, Plateau and Niger states voted a total of N818.7 for 2021fiscal year. Niger and Plateau have the highest – N153.4 billion and 147.6 billion respectively. Kogi and Niger recorded the highest revenues of N30.96 and N30.06 billion respectively out of the Zone’s total N170 billion. Niger has the highest external debt of $66 million (of the total $256 million) followed by Nasarawa $55.82 million. Of the Zones total N520 billion domestic debt, Benue and Plateau have the highest of N128.5 billion and N127 billion respectively. The unemployment rate of the Zone is 26.3 per cent.
The North-East Zone comprising Adamawa, Bauchi, Borno, Gombe, Taraba and Yobe has a total budget of N975.7 billion with the highest being Borno N248 billion, followed by Bauchi N213.9 billion. The Zone’s total revenue is N164 billion with the highest recorded by Borno and Bauchi N33.68 billion and N28.82 billion respectively. The Zone’s total external debt is $397 million with Bauchi and Adamawa recording $129.44 million and $105.47 million respectively. The total domestic debt of the Zone is N546.1 billion out of which Adamawa and Taraba owe the highest – N116.89 billion and N96.29 billion respectively. Average unemployment rate of the Zone is 28.4 per cent.
The Zone of North-West made up of Jigawa, Kaduna, Kano, Katsina, Kebbi, Sokoto and Zamfara states has a total budget of N1.32 trillion. Katsina and Kaduna have the highest with N286.6 billion and N246 billion respectively. The total revenue of the Zone is N250 billion with Kano and Katsina recording N55.75 billion and N44.71 billion respectively. The Zone has a total external debt of $844.8 million with Kaduna owning the highest – $570.04 million, followed by Katsina $74.99 million. The Zone’s total domestic debt is N464.7 billion; Katsina and Kaduna owe the highest: N116.99 billion and N72.50 billion respectively. The Zone has an average unemployment rate of 23 per cent.
The Federal Capital Territory (FCT) has a budget of N45.5 billion for 2021. The total revenue figure as at H1 2020 is N68.25. It has $29.08 million and N90.22 billion external and domestic debts respectively. Average unemployment rate is 29.1 per cent.
Zamfara as Case Study
Zamfara state of North-West Zone has approved budget of N142.7 billion. Its FAAC revenue as at H1 2020 is N19.23 billion while IGR is N7.08 billion making a total of N26.32 billion, according to NBS. External and domestic debts are $29.63 million and N79.28 billion respectively, as published by the Debt Management Office (DMO). The state governor, Bello Matawalle, at the presentation of the N145.43 billion budget to the State assembly, said the budget was made up of N64 billion recurrent expenditure, or 45 per cent; while N81.04 or 56.7 per cent was for capital expenditure. The state assembly later adjusted the figures downwards to N63.1 billion and N79.6 billion respectively.
A recent report by The Cable showed a consistent pattern of profligacy by state governors amid huge debt overhang and depleting resources: Zamfara state government provided N2 billion for the government house’s “air transport” expenses, and another N470 million for international flights of all ministries, departments and agencies (MDAs). Other puzzling provisions are those for the purchase of water equipment and electrical cables — N1 billion; N500 million welfare packages for the ‘seat of power’ and another N500 million for “special days and celebrations”.
Gov. Matawalle also got an allocation of N150 million for his medical expenses; N100 million (about 65 per cent of the figure) will go into his medical care abroad while the remaining N50 million will be for such expenses in Nigeria. The money is equivalent to the allocation of 20 state’s general hospitals listed in the budget. It also comprises 90 per cent of N167 million allocated for the total expenses of overseas treatment for government officials.
The governor and deputy governor are to spend N165 million on donations; this is 35 per cent of the N476 million set aside for that purpose across all MDAs. Under the governor’s office, a sum of N132 million is set aside for activities of the governor’s wife without explaining what those activities are. The report revealed that the money is equivalent to the allocation of 21 government secondary schools which got N6.2 million each.
Furthermore, the state also budgeted the sum of N228 million for hotel reservations abroad in 2021, out of which N100 million would go to the office of the secretary to the state government (SSG). The governor’s office gets N12 million of the amount while the state house of assembly is allocated N60 million. About nine other government agencies also get budgetary allocation for hotel reservations abroad, which is aside expenditure for some international training.
The sum of N258 million is also set aside for outfits of government officials under 10 different MDAs. The office of the SSG got the lion’s share with N100 million, followed by the Sharia court of appeal with N52 million. The high court, state house of assembly and ministry of justice received N33.5 million, N23 million and N20 million respectively, among others.
There is also the allocation for rent across most MDAs: N1.6 billion goes into this sub-head with the Hajj Commission and Office of the SSG getting the highest sums of N343 million and N266 million respectively. Zamfara also provided N87.3 million to engage the services of escorts and private security operators, despite regular security personnel on government payroll. The state also plans to inject N200 million into its amnesty programme while three projects related to grazing reserves will gulp N354 million.
Economic Fundamentals
With inflationary trend on the upward trajectory, generally high cost of living – especially food items, getting out of reach of the ordinary Nigerians, spate of insecurity taking a worsening dimension, Nigeria’s misery index becoming more appalling, governors getting battle-ready with Labour over minimum wage and backlog of pensions, states are at a cross-roads over the implementation of their 2021 budgets.
The recent report by the NBS showed a sharp decline in capital importation which is a window of employment opportunity for the youth. Some states in the North are battling with the overflow of inmates in the internally displaced persons (IDP) camps, which worsens the situation of out-of-school children across the country. It is hard to figure out how the N8.3 trillion state budgets will translate into the magic wand of economic and job growth among the sub-nationals in 2021. More so, when the governors and their parties are amassing wealth to fortify their political enclave against 2023 elections.
About the Author
Sam Diala is a Bloomberg Certified Financial Journalist with over a decade of experience in reporting Business and Economy. He is Business Editor at THEWILL Newspaper, and believes that work, not wishes, creates wealth.
