News

20 Governors Borrow Fresh N446bn As Revenues Tumble

Published

2 years ago

September 18, 2024

Editor

Debt servicing costs incurred by 29 state governments consumed 80.7 per cent of their Internally Generated Revenue during the first six months of 2024, highlighting the significant financial burden the sub-nationals currently face, according to The PUNCH.

The dire situation also forced the governors to borrow a total sum of N446.29 billion within the same period despite a 40 per cent increase in its statutory allocation from the Federation Account.

The latest information is according to an analysis of data obtained by our correspondent using the budget implementation reports from each state’s website and Open Nigerian States. This BudgIT-backed website serves as a repository of government budget data.

The performance report is prepared quarterly and issued within four weeks from the end of each quarter.

This heavy burden underscores a critical issue in fiscal management, as the vast majority of the revenue that states could otherwise allocate to essential public services and development projects is being diverted to meet debt obligations.

It also reveals the severe constraints faced by state governments in managing their debt burdens inherited from previous administrations and addressing the needs of their residents.

Nigerians had hoped that with an increased statutory allocation of 40 per cent from the central government, state governors should have more than enough to fulfill their statutory obligations.

In 2023, state governors got the most FAAC allocations in at least seven years. The rise in FAAC allocations to the three tiers of government, especially states followed the petrol subsidy removal and currency reforms of the current administration.

The reforms have reportedly led to a 40 per cent boost in income. Experts believe the revenue increase should have reduced state governments’ appetite for more borrowing.

Instead, the sub nationals are spending a large chunk on repaying loans and taking more loans.

Recall report earlier had it that most of the Federal Accounts Allocation Committee funds for Osun, Ondo, Kaduna, and Cross Rivers states will be used in servicing debts this year.

This is because these states currently have a deficit of N10.94bn, N27.72bn, N15.83bn, N10.02bn respectively following debt servicing deductions by FAAC.

With such a large portion of revenue being used to service debt, it becomes increasingly challenging for states to achieve long-term economic stability and improve the quality of life for their residents.

Earlier this year, Kaduna State governor, Uba Sani had complained vehemently about the huge debt burden inherited from previous administrations, lamenting that it had stopped the prompt payment of salaries and more borrowings in the last nine months of his government.

The governor who made this known while addressing a Town Hall Meeting at the late Umaru Musa Yar’Adua Hall, stated that his administration inherited a total of $587m, N85bn, and 115 contract liabilities.

He said, “Despite the huge debt burden of $587m, N85bn, and 115 contractual liabilities sadly inherited from the previous administration, we remain resolute in steering Kaduna State towards progress and sustainable development. We have conducted a thorough assessment of our situation and are sharpening our focus accordingly.”

The PUNCH had reported that state governors faced an uphill task of stimulating the economies of their respective states after they inherited at least N2.1tn in domestic debts and $1.9bn in external debts from their predecessors.

This was as 22 states spent a total sum of N251.79bn to service debt borrowed by past administrations within nine months of assuming office (July 2023 and March 2024).

The situation also forced the state governments of Ekiti, Cross River, and Ogun to propose a suspension of their foreign debt repayments worth $501m due to severe foreign exchange volatility.

The request, though rejected by FAAC, was part of their efforts to mitigate the heightened debt service burdens, which state officials claimed has significantly hampered their ability to service existing debts.

Experts say the high debt servicing costs leave little room for investment in infrastructure, education, healthcare, and other key areas vital for economic growth and social welfare.

Meanwhile, an analysis of the budget implementation report showed that Akwa-Ibom, Borno, Cross Rivers, Edo, Katsina, and Niger spent between 60 and 80 per cent of their internally generated revenue to repay owed debts.

Also, states as Abia, Anambra, Bayelsa, Delta, Ebonyi, Ekiti, Jigawa, Enugu, Kebbi, Kwara, Ondo, Osun Zamfara, and Oyo disbursed between 13 and 58 per cent of their revenue for debt servicing

While the amount spent on debt servicing for nine states including Adamawa, Bauchi, Gombe, Imo, Kano, Kogi, Plateau, Taraba, and Yobe exceeded their revenue within the period.

Data for Benue, Nasarawa, Ogun, Rivers, Sokoto, and Kaduna states were not available when this report was filed. Only Lagos State recorded an impressive IGR of N603.71bn while it paid N201.49bn as debt charges.

A state-by-state breakdown indicated that Abia State under the leadership of Governor Alex Otti spent N4.83bn on servicing its debt, while it earned N15.6bn as revenue, representing a ratio of 31 per cent.

Adamawa spent N14.48bn on its debt but earned N5.75bn, recording a deficit of minus 252 per cent, Akwa-Ibom state spent N20.78bn on its servicing but got N31.74bn IGR indicating 65.4 per cent ratio.

Anambra serviced its debt with N4.8bn but got N18.61bn IGR at a ratio of 25.9 per cent. Bauchi got a debt service ratio of minus 42.9 per cent after it earned N3.92bn but spent N16.8bn on servicing. Bayelsa spent N17.84bn on servicing but earned N46.98bn as revenue, indicating a servicing ratio of 38 per cent.

Further analysis of the report indicated Borno spent N7.25bn on debt charges and earned N12.04bn, representing a ratio of 60.2 per cent, Cross Rivers had a debt service ratio of 60.7 per cent after it spent N12.05bn on loans and got N19.86bn IGR.

Delta State’s burden was 58.2 per cent after it spent N39.08bn on reducing its debt and earned N67.05bn within the review period. Ebonyi had a 48.6 per cent debt ratio due to its N5.05bn spending on debt and N10.39bn revenue collection. Edo State under the leadership of Governor Godwin Obaseki spent N22.66bn on servicing and collected N34.44bn as revenue, indicating a debt ratio of 65.8 per cent.

Ekiti had a debt service ratio of 47.9 per cent after it spent N7.85bn on loans and got N16.39bn IGR. Enugu spent N3.49bn on its debt but earned N16.39bn, indicating a 20.6 per cent ratio. Gombe spent N13.07bn on its debt but earned N9.6bn, recording a deficit of minus 136 per cent. Imo State also recorded a deficit of minus 1.10 per cent after it spent N10.68bn on servicing but got N9.69bn as revenue.

Also, Jigawa State spent N1.89bn on servicing while it earned N4.55bn as revenue, representing a ratio of 41.6 per cent. Kano recorded a deficit of minus 244.4 per cent due to N60.02bn expense on debt but collected N24.57bn as revenue.

Katsina had a 77.4 per cent debt ratio due to its N8.14bn spending on debt and N10.51bn revenue collection. Kebbi spent N1.99bn on its loan servicing while it earned N4.79bn as revenue, representing a ratio of 41.6 per cent. Kwara State recorded the lowest debt-to-revenue ratio of 13.9 per cent, and spent N4.87bn on debt charges but collected N35.1bn as revenue.

Kogi spent N12.79bn on servicing and collected N12.75bn as revenue, indicating a debt ratio of minus 1.06 per cent. Niger State recorded a debt ratio of 80.7 per cent due to debt charges of N11.88bn and revenue collection of N14.73bn.

Ondo State recorded a debt to revenue of 52.4 per cent, Osun (43.2 per cent), Oyo (57.2 per cent). Plateau State recorded the highest debt-to-revenue ratio of minus 550.76 per cent, spending N61.23bn on debt charges but collected N11.11bn as revenue. Taraba and Yobe states recorded a deficit of minus 283.5 per cent and 1.16 per cent respectively.

Experts have, however, attributed the significant increase in debt servicing cost partly to the devaluation of the naira, which drove up the cost of servicing foreign debt obligations as the nation grapples with the forex liquidity crisis and exchange rate volatility.

The Director/CEO of the Centre for Promotion of Private Enterprise, Dr Muda Yusuf, speaking in an exclusive interview on Sunday, stated that the significant debt servicing cost was adversely impacted by the depreciation of the naira, which caused a decline in its value relative to other currencies.

He noted that the enormous debt burden inherited by the current administration is also straining state finances and impacting its ability to meet major obligations.

Mr Muda said, “The point is that these states inherited a huge burden of debts. The figure mentioned may sound outrageous but is not much when calculated in dollar terms. Multilateral debts are also tied to infrastructural projects and developmental purposes. Borrowing is not in itself bad if it is used for developmental purposes but the burden of debt must not suffocate the state finances and affect its ability to fulfill major obligations.

“Also, those debts are foreign and once the naira depreciates, it affects the level of debt. As they struggle to service it, the level is still going up because of the exchange rate depreciation. With the depreciation of the currency, the burden of servicing those loans has become extremely very heavy. The exchange rate factor is a major challenge in the debt burden of many states.”

Government spending has come under increased scrutiny in recent times, particularly in light of the country’s worsening economic challenges.

At different fora, financial experts have also raised concerns about states’ spending on recurrent expenditure, highlighting the need to embrace financial innovations.

A professor of Economics at Babcock University, Segun Ajibola, stated that the enduring problem of high governance expenses had persisted at the state level, with inadequate oversight and accountability resulting in minimal economic benefits for grassroots citizens.

Ajibola, a former president of the Chartered Institute of Bankers, lamented that state assemblies had also abandoned their oversight duties, leaving the state governors to operate with no iota of transparency and accountability.

He said, “The first issue is the perennial complaint about the high cost of governance in Nigeria and at all levels. When you look at these issues, attention is often concentrated on the Federal Government, so the searchlight is always more on the central government. Most often, nobody cares about what is happening in the states and local government, and that is where the problem is.

“There are so many institutional frameworks in place to look at what is happening at the federal level but who cares about the states? The cost of governance in relative terms is even much higher in states than the federal and that is why you hardly feel the impact of governance in most states.

“Only a few states can boost a significant presence in the lives of their people in our states. The state assemblies are expected to conduct oversight functions on the activities of the executives in their respective states, but in reality, how many states are doing that, leaving the executives to be all in all incurring high costs.”

Meanwhile, 20 state governments borrowed a total sum of N446.29bn collectively to address their budget deficits and to cover various expenses, including essential services, infrastructure projects, and operational costs.

The PUNCH findings also revealed that the majority of these loans were sourced from multilateral and international creditors, contrary to the Federal Government’s emphasis on borrowing from the domestic market.

Further analysis showed that Cross Rivers State was among the states that got the highest loan of N121.22bn between January and June. It was followed by Oyo State with N55.36bn loans. Third on the list is Kogi State with loans worth N41.22bn.

Katsina State also obtained loans worth N34.09bn from creditors within the quarter.

Other states including Niger got N34.03bn, Gombe (N32.38bn), Ondo (N20,82bn), Borno (N20.7bn), Bauchi (N19.28bn), Taraba (N20.23bn), Yobe (N10.17bn), Kwara (N10.06bn), Ekiti (N7.94bn), Ebonyi (N6.43bn), Kano (N6.15bn), Abia (N3.37bn), Enugu (N1.39bn).

The states with the least borrowing include Edo (N633.73m), Osun (N250m), and Plateau state with N530.86m loan.
PUNCH

News

Xenophobic Attacks: Oshiomhole Tells FG To Retaliate Against South African Companies In Nigeria

Published

6 hours ago

May 5, 2026

Editor

Senator Adams Oshiomhole has called on the Federal Government to retaliate against South African businesses operating in Nigeria following the recent attacks on Nigerians in South Africa.

Speaking during plenary on Tuesday, Oshiomhole said the Federal Government should consider revoking the working license of South African owned companies such as MTN and DSTV.

He argued that Nigeria must respond firmly to what he described as persistent hostility against its citizens.

“I am not going to shed tears. If you hit me, I hit you. I think it is appropriate in diplomacy. It is an economic struggle,” Oshiomhole said.

He argued that while some South Africans accuse Nigerians of taking their jobs, Nigerians should return home and take over employment opportunities created by major South African companies operating in the country, including MTN and DSTV.

“When we hit back, the President of South Africa will not only talk but will also go on his knees to recognise that Nigeria cannot be intimidated.

“We will not condone any life being lost. If a crime has been committed under the South African law they have the right to bring any such person to justice, but to kill our people as if we are helpless, we will not allow that,” Oshiomhole added.

DAILY POST reports that several Nigerians in South Africa have reportedly been attacked, and their businesses destroyed, in ongoing xenophobic attacks in the country.

News

IGP Orders Officers Display Name Tag On Uniform, Gives Update On State Police

Published

6 hours ago

May 5, 2026

Editor

The Inspector General of Police, IGP, Tunji Disu, has ordered all police personnel to always have their name tags on their uniforms for easy identification.

Disu disclosed that only police personnel who are undercover are exempted from displaying their name tags.

Speaking on Tuesday, Disu said: “All police officers should have their name tags. All of us on the high table have our names apart from the undercover among us so if you look at all the Commissioners of Police we have our name tags, so it’s not our standard.

News

Court Orders SERAP To Pay DSS Operatives N100m For Defamation

Published

11 hours ago

May 5, 2026

Editor

The High Court of the Federal Capital Territory has ordered a non-governmental organization, the Socio-Economic Rights and Accountability Project, SERAP, to pay N100 million as damaged to two operatives of the Department of the State Services, DSS, for unjustly defaming them in some publications.

The court also ordered SERAP to tender public apologies to the defamed officers,
Sarah John and Gabriel Ogundele, in two national newspapers, two television stations and its website.

Besides, the organization was also ordered to pay the two operatives N1 million as cost of litigation and 10 percent post-judgment interest annually on the judgment sum until it’s fully liquidated.

Justice Yusuf Halilu of the High Court of the Federal Capital Territory gave the order on Tuesday while delivering judgment in a N5.5 billion defamation suit instituted against SERAP by the DSS operatives.

The judge found SERAP liable for unjustly defaming the two DSS operatives with allegations that they unlawfully invaded its Abuja office, harassed and intimidated its staff, in September 2024.

In the offending publication on its website and Twitter handle, SERAP alleged that the two operatives unlawfully invaded and occupied its office with sinister motives.

The judge held that the publication was in bad taste especially from an organization established to promote transparency and accountability, as nothing in the publication was found to be truthful.

The DSS staff had listed SERAP as 1st defendant in the suit marked CV/4547/2024. SERAP’s Deputy Director, Kolawole Oluwadare, was listed as the 2nd defendant.

In the suit, the claimants – Sarah John and Gabriel Ogundele – accused the two defendants of making false claims that they invaded SERAP’s Abuja office on September 9, 2024..

Counsel to the DSS, Oluwagbemileke Samuel Kehinde, had while adopting his final address in the mater urged the judge to grant all the reliefs sought by his client in the interest of justice.

He admitted that although the names of the two claimants were not mentioned in the defamation materials, they had however established substantial circumstances that they are the ones referred to in the published defamation article by SERAP on its website.

The counsel submitted that all ingredients of defamation have been clearly established and the offending publication referred to the two officials of the secret police.

However, SERAP, through its counsel, Victoria Bassey from Tayo Oyetibo, SAN, law firm, asked the court to dismiss the suit on the ground that the two claimants did not establish that they were the ones referred to in the alleged defamation materials.

She said that SERAP used “DSS officials” in the alleged offending publication, adding that the two claimants must establish that they are the ones referred to before their case can succeed.

Similar arguments were canvassed by Oluwatosin Adefioye who stood for the second defendant, adding that there was no dispute in the September 9, 2024 operation of DSS in SERAP’s office.

He said that since SERAP in the publication did not name any particular person, the claimants must plead special circumstances that they were the ones referred to as the DSS officials.

Besides, he said that there is no organization by name Department of State Services in law, hence, DSS cannot claim being defamed adding that the only entity known to law is National Security Agency.

The claimants had in the suit stated that the alleged false claim by SERAP has negatively impacted on their reputation.

The DSS also stated, in the statement of claim, that, in line with the agency’s practice of engaging with officials of non-governmental organisations operating in the FCT to establish a relationship with their new leadership, it directed the two officials – John and Ogunleye – to visit SERAP’s office and invite them for a familiarization meeting.

The claimants added that in carrying out the directive, John and Ogunleye paid a friendly visit to SERAP’s office at 18 Bamako Street, Wuse Zone 1, Abuja on September 9 and met with one Ruth, who upon being informed about the purpose of the visit, claimed that none of SERAP’s management staff was in the country and advised that a formal letter of invitation be written by the DSS.

John and Ogundele, who claimed that their interactions with Ruth were recorded, said before they immediately exited SERAP’s office, Ruth promised to inform her organisation’s management about the visit and volunteered a phone number – 08160537202.

They said it was surprising that, shortly after their visit, SERAP posted on its X (Twitter) handle – @SERAPNigeria – that officers of the DSS are presently unlawfully occupying its office.

The claimant added, “On the same day, the defendants also published a statement on SERAP’s website, which was widely reported by several media outfits, falsely alleging that some officers from the DSS, described as “a tall, large, dark-skinned woman” and “a slim, dark skinned man,” invaded their Abuja office and interrogated the staff of the first defendant (SERAP).

John and Ogundele stated that “due to the false statements published by the defendants, the DSS has been ridiculed and criticised by international agencies such as the Amnesty International and prominent members of the Nigerian society, such as Femi Falana (SAN)”.

“Due to the false statements published by the defendants, members of the public and the international community formed the opinion that the Federal Government is using the DSS to harass the defendants.”

They added that the defendants’ statements caused harm to their reputation because the staff and management of the DSS have formed the opinion that the claimants did not follow orders and carried out an unsanctioned operation and are therefore, incompetent and unprofessional.

The claimants therefore prayed the court for the following reliefs: “An order directing the defendants to tender an apology to the claimants via the first defendant’s (SERAP’s) website, X (twitter) handle, two national daily newspapers (Punch and Vanguard) and two national news television stations (Arise Television and Channels Television) for falsely accusing the claimants of unlawfully invading the first defendant’s office and interrogating the first defendant’s staff.

“An order directing the defendants to pay the claimants the sum of N5 billion as damages for the libellous statements published about the claimants.

“Interest on the sum of N5b at the rate of 10 percent per annum from the date of judgment until the judgment sum is realised or liquidated.

“An order directing the defendants to pay the claimants the sum of N50 million as costs of this action.”