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22 States Spent N251bn On Debt Servicing In Nine Months – Report

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Twenty-two states have spent a total sum of N251.79bn to service debt borrowed by past administrations within nine months of assuming office, according to The PUNCH.

It was also gathered that the states obtained fresh loans of N310.99bn between July 2023 and March 2024, despite increased monetary allocations from the Federation account.

The information was obtained from the budget implementation reports of each state sourced from the Open Nigerian States, a budgIT-backed website that serves as a repository of government budget data. BudgIT is a Nigerian civic organisation promoting transparency.

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The performance report is prepared quarterly and issued within four weeks from the end of each quarter. It includes the original approved budget and revised/final budget appropriation for the year 2023 against each organisational unit for each of the core economic classifications of expenditures (personnel, overheads, capital, and others). It also includes the actual expenditures for the quarter Q3, attributed to each organisational unit, as well as the cumulative expenditures for the year to date, and balances against each of the revenue and expenditure appropriations.

An analysis by The PUNCH showed that the states include Abia, Akwa Ibom, Anambra, Benue, Cross River, Delta, Ebonyi, Ekiti, Jigawa, Kaduna, Kano, Katsina, Kebbi, Kogi, Niger, Ondo, Osun, Plateau, Rivers, Sokoto, Taraba and Zamfara.

Further analysis of the report indicated that the states 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.

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Investigations also showed that the states were confronted with many months of unpaid workers’ salaries and mounting pension liabilities amidst agitation for the implementation of the nationally agreed minimum wage, rising inflation, escalating prices of goods and services, and dwindling purchasing power.

In Abia State, Dr Alex Otti, who emerged as the only governor on the platform of the Labour Party inherited a total domestic debt of N104,573,334,025.73, and an external debt of $95,632,239.04.

While Benue State Governor, Hyacinth Alia, got N143,368,150,982.89 in domestic debt, and $30,472,977.14 obligations to foreign creditors.

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The Governor of Cross River State, Bassey Otu, carried the burden of N175,198,799,155.96 and $215,754,975.33 in domestic and foreign debts.

Also, Akwa Ibom State Governor, Umo Eno, met a domestic debt of N219,617,660,991.63 and $46,569,647.22 in external debt among others.

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Recall that following the removal of fuel subsidy and the unification of the foreign exchange markets, there was a notable increase in states’ earnings from the Federation Account Allocation Committee, reaching a total of N3.34tn in the post-fuel subsidy era.

With the improved earnings, states had the freedom to settle outstanding loans acquired by the previous administration, particularly during the third and fourth quarters of 2023. This financial enhancement provided the states with the opportunity to address fiscal obligations, and alleviate financial burdens inherited from previous administrations.

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 CBN grappled with the forex liquidity crisis and exchange rate volatility.

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A breakdown of the implementation report showed that the states spent N75.47bn to service domestic and external loans in the third quarter of 2023. This increased by 5.12 per cent or 3.87bn to N79.34bn in the fourth quarter, and N96.99bn in the first quarter of 2024 (January – March).

According to the report, Abia state disbursed N2.62bn to service inherited debts, while Akwa-Ibom spent N21.96bn in nine months on debt servicing. Anambra spent N5.12bn, Cross River spent N13.82bn, and Delta State spent N30.31bn to service loans obtained by former Governor Ifeanyi Okowa.

Ebonyi State under the leadership of Francis Nwifuru has spent N7.50bn on servicing loans obtained by past administrations, while the Ekiti State Governor, Biodun Oyebanji, approved a sum of N9.88bn for repaying debts.

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Other states including Jigawa spent N4.34bn, Kebbi (N1.98bn), Kogi (7.29bn), Niger (N3.66bn), Ondo (N11.35bn), Osun (N14.76bn), Plateau (N51.39bn), Rivers (N4.12bn), Sokoto (N4.04bn), Taraba (N9.49bn), Zamfara (N3.1bn) and Kaduna (N16.04bn).

Despite this heavy debt servicing burden, the report indicated that the state governments had continued to obtain more loans to take care of different expenditures.

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Further analysis showed that the states obtained credit facilities totalling N310.99bn within the review period, despite heavy financial allocations from the federal government.

The report revealed that states, in 2023, got the highest Federal Account Allocation Committee allocations in at least seven years with N627.73bn obtained in September, followed by N610.5bn in December, N555.75bn in August, N533bn in November, N514bn in July, and N497.97bn in October.

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

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The PUNCH had earlier reported that 13 new state governors collectively borrowed N226.8bn from domestic and external financiers in the first six months after taking office.

Further analysis showed that Katsina State was among the states that got the highest loan of N20.14bn between January and March. It was followed by Ondo State with N18.33bn loans. Third on the list is Niger State with loans worth N16.19bn.

Kogi State also obtained loans worth N11.33bn from creditors within the quarter.

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Other states including Zamfara got N6.23bn, Ekiti (N5.65bn), Abia (N3.37bn), Kaduna (N2.27bn), Ebonyi (N173.36m), Osun (N174.24m), Plateau (N322.12m) and Taraba (N6.23bn).

In April, The PUNCH reported that most of the FAAC funds for Osun, Ondo, Kaduna, and Cross River states will be used in servicing debts this year.

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

The states, as indicated in their 2024 budget may have to rely on Internally Generated Revenue or borrow from domestic/external sources to finance payment or possibly seek alternative solutions to settle their civic obligations to their workers throughout this year.

A further breakdown of the data revealed that Lagos, Akwa-Ibom, Delta, Ogun, Zamfara, Plateau, and Sokoto will be the highest debt-paying sub-nationals.

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Commenting on the issue, economist, Paul Alaje, said debt servicing and loans were burdens that could limit economic development at the sub-national level.

Paul, speaking in an earlier interview, stated that the huge debts left by past administrations was inimical to growth, and added that loans collected by state governments and the projects the governors spent the money on should be properly investigated.

He said, “Debts are like a burden, especially when the money collected is not spent on capital expenditure or projects that can create revenue for the government in the future. In Osun State, for instance, Gboyega Oyetola’s administration took over a huge debt profile from his predecessor, Rauf Aregbesola, and when Aregbesola left, Oyetola started struggling not to borrow more money. Few new governors can borrow more, because lenders will also consider their ability to pay.”

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Efforts made to get the reaction of the Director General of the Nigeria Governors’ Forum, Abdulateef Shittu, were unsuccessful. He declined to comment when The PUNCH reached him on the issue, stating that the situation could only be well analysed by the Debt Management Office.

Debt repayment part of governance – Sokoto govt

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Efforts to get the reaction of the Sokoto State Commissioner for Information and Orientation, Sambo Danchadi, were not successful, as his number was not available at the time of filing this report.

However, a top government official in the state who spoke on condition of anonymity said debt servicing was part of the government’s work, adding that it was difficult to ascertain if all the debts were from the immediate past administration.

He said, “Some of these debts we are talking about were owed during the days of the old Sokoto State, comprising of Sokoto, Kebbi, and Zamfara.

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“The unfortunate thing is that the immediate past government did not hand over any document whatsoever to the incumbent administration to ascertain many things,” he added.

Debt servicing not affecting Ondo

However, the Ondo State Governor, Lucky Aiyedatiwa, admitted that the state government had been servicing debt incurred by the past administrations in the state without problem.

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The governor, who spoke through his Chief Press Secretary, Ebenezer Adeniyan, said his administration had not borrowed any money since it came on board.

However, the governor noted that the debt had not made any negative impact on the state’s economy, saying the government was running smoothly.

He said, “Servicing debt is a responsibility of the government, and this administration is not defaulting on repaying those debts.

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“However, the Aiyedatiwa administration has not incurred any debt since it assumed office. Also, debt servicing did not have much impact on the state’s economy. The repayment was captured in the budget. So, it was prepared for.”
PUNCH

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Trump Threatens To Unleash ‘Hell’ On Hamas

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US President Donald Trump has given Hamas until 2200 GMT on Sunday to accept his 20-point plan for peace in Gaza, warning the Palestinian militant group faced “all hell” if it did not agree to the terms.

The US leader set the deadline — which would fall at 1:00 a.m. Monday in Gaza — after an official for the Islamist movement told AFP earlier on Friday that the group still needed time to study the proposal to end nearly two years of devastating war in the Palestinian territory.

“If this LAST CHANCE agreement is not reached, all HELL, like no one has ever seen before, will break out against Hamas,” Trump posted on his Truth Social platform.

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The proposal, backed by Israeli Prime Minister Benjamin Netanyahu, calls for a ceasefire, the release of hostages within 72 hours, Hamas’s disarmament and a gradual Israeli withdrawal from Gaza.

READ ALSO:Israeli Forces Strike Gaza Despite Trump’s Ceasefire Call

That would be followed by a post-war transitional authority headed by Trump himself.

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“Hamas is still continuing consultations regarding Trump’s plan… and has informed mediators that the consultations are ongoing and need some time,” the official said on condition of anonymity because they were not authorised to speak publicly on the matter.

On Tuesday, Trump gave Hamas “three or four days” to accept his plan, which has been welcomed by world powers, including Arab and Muslim nations.

Mohammad Nazzal, a member of Hamas’s political bureau, said in a statement Friday that the “plan has points of concern, and we will announce our position on it soon.”

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READ ALSO:Israel Strikes Hamas Leadership, Explosions Reported In Qatar’s Capital

As Hamas mulled Trump’s peace plan this week, a Palestinian source close to the group’s leadership told AFP on Wednesday that the Islamist movement wanted to amend some clauses, including the one on disarmament.

Hamas leaders also want “international guarantees” for a full Israeli withdrawal and that no assassination attempts would be made inside or outside Gaza, the source added.

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Another source familiar with the negotiations told AFP that the group was split over Trump’s plan.

Structurally, the group’s leadership is divided between officials based in the Gaza Strip and those abroad, particularly in Qatar.

READ ALSO:Spain Cancels $825m Israel Arms Deal Over Gaza

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Much of Hamas’s leadership has also been wiped out in Israeli attacks throughout the war.

The source told AFP that “the first (opinion) supports unconditional approval, as the priority is a ceasefire under Trump’s guarantees, with mediators ensuring Israel implements the plan”.

“The second has serious reservations regarding key clauses… They favour conditional approval with clarifications reflecting Hamas’s and the resistance factions’ demands,” the source added.

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Hugh Lovatt, a senior policy fellow at the European Council on Foreign Relations, said “ultimately it’s not just about convincing Hamas leadership in Doha, but also the leadership in Gaza, as well as Hamas members and fighters in Gaza.”

READ ALSO:Israel Begins Ground Offensive In Gaza Despite International Criticism

“Additionally, Hamas must then be able to convince other factions in Gaza,” he added.

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The war was triggered by Hamas’s October 7, 2023 attack on Israel, which resulted in the deaths of 1,219 people, mostly civilians, according to an AFP tally of Israeli official figures.

Israel’s retaliatory offensive has killed at least 66,288 Palestinians, according to health ministry figures in the Hamas-run territory that the United Nations considers reliable.

Their data does not distinguish between civilians and combatants, but indicates that more than half of the dead are women and children.

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Israeli Forces Strike Gaza Despite Trump’s Ceasefire Call

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Gaza’s civil defence agency said Saturday that Israel carried out dozens of attacks on Gaza City despite US President Donald Trump’s appeal to end bombardments after Hamas accepted a ceasefire deal.

It was a very violent night, during which the (Israeli army) carried out dozens of air strikes and artillery shelling on Gaza City and other areas in the Strip, despite President Trump’s call to halt the bombing,” civil defence spokesman Mahmud Bassal told AFP.

Bassal, whose agency is a rescue force which operates under Hamas authority, added that 20 homes were destroyed in the overnight bombardments.

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“The situation is very serious in Gaza City,” Bassal said, adding that his teams were not able to reach all the casualties due to the “presence of tanks and the ongoing bombardment”.

Contacted by AFP, the Israeli military said it was “checking” reports of overnight bombardments on Gaza City.

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Gaza City’s Baptist Hospital said in a statement that it received casualties from a strike on a home in Tuffah neighbourhood, including four dead and “several wounded”.

READ ALSO:Brazil Slams Israel’s Gaza Aid Interception, Demands Detainees’ Safety

Nasser Hospital in south Gaza’s Khan Yunis said two children were killed and eight people were wounded in a drone strike on a tent in a camp for displaced Gazans.

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The peace plan for Gaza, presented by Trump this week and backed by Israeli Prime Minister Benjamin Netanyahu, calls for a ceasefire, the release of hostages within 72 hours, Hamas’s disarmament and a gradual Israeli withdrawal from Gaza.

Hamas said on Friday it was ready to release hostages held in Gaza under the Trump plan, but wanted negotiations on the details and a say in the future of the Palestinian territory.

AFP

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Prosecutors Seek 11-year Sentence For Diddy, Citing ‘Lack Of Remorse’

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Prosecutors urged a federal judge Friday to sentence Sean “Diddy” Combs to more than a decade behind bars for his conviction on two prostitution-related counts, saying the music mogul had shown a lack of remorse.

This is not a person who has accepted responsibility,” prosecutor Christy Slavik told the New York court at Diddy’s sentencing hearing.

“His remorse was qualified. It’s as though he thinks the law doesn’t apply to him,” Slavik said in arguing for an 11-year prison sentence for the 55-year-old hip-hop innovator. ” “His respect for the law is just lip service.”

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Combs’s lawyers have asked the judge for a 14-month sentence, which would effectively be time served.

Slavik said Combs had booked speaking engagements in Miami next week in anticipation of a light sentence, which she called “the height of hubris.”

READ ALSO:Jury Selection Begins In Sean ‘Diddy’ Combs Sex Crimes Trial

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Judge Arun Subramanian for his part said federal sentencing guidelines suggested a prison term of between six and seven years although he has the latitude to impose more or less.

The judge also noted an apparent lack of remorse, saying Combs has “challenged his factual guilt full-throatedly.”

Combs was expected to address the court at the sentencing hearing after submitting a letter to the judge on Thursday pleading for mercy and saying he had “lost my way.”

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Following two months of often searing testimony, jurors in July rejected the most serious charges of sex trafficking and racketeering against Combs, sparing him the prospect of life in prison.

Combs’s mother and six of his children were in court on Friday and have submitted letters to the judge in his support.

READ ALSO:Woman Who Accused Jay-Z, Diddy Of Rape Drops Lawsuit

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In his plea to the judge, Combs apologised for his conduct, saying he was “scared to death” to be away from his family and vowing he “will never commit a crime again.”

“I lost my way,” he wrote. “I got lost in my journey. Lost in the drugs and the excess.”

Combs’s former girlfriend, Casandra Ventura, asked the judge in a letter of her own to consider “the many lives that Sean Combs has upended with his abuse and control.”

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– ‘Humbled and broken’ –

Ventura, the 39-year-old singer known as Cassie, testified for days while heavily pregnant.

She described in wrenching detail physical, emotional and sexual abuse she suffered while in a more than decade-long relationship with Combs.

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READ ALSO:Sean ‘Diddy’ Combs Reacts After Kanye West Calls For His Release From Prison

Ventura and another woman, identified as Jane, said they were coerced into performing so-called “freak-offs”: sexual marathons with hired men that Combs directed and sometimes filmed.

“The entire courtroom watched actual footage of Combs kicking and beating me as I tried to run away from a freak off in 2016,” Ventura wrote.

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People watched this footage dozens of times, seeing my body thrown to the ground, my hands over my head, curled into a fetal position to shield me from the worst blows,” she said, noting she has nightmares and flashbacks “on a regular, everyday basis.”

Ventura said she and her family had left the New York area for fear of “retribution” from Combs if he is released.

READ ALSO:Sean ‘Diddy’ Combs Reacts After Kanye West Calls For His Release From Prison

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The defense didn’t deny Combs’s sexual activity but insisted it was consensual.

They also didn’t deny Combs’s years of violence against both romantic partners as well as employees — but they said it didn’t meet the legal threshold for the grave charges he faced.

Jurors took their side.

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The conviction on lesser if still serious counts stemmed from a federal statute that makes it illegal to transport people across state lines for prostitution.

Combs has been incarcerated in Brooklyn for more than a year.

He said his time in prison has left him “reborn.”

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I have been humbled and broken to my core,” Combs wrote.
AFP

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