Three Northeastern States to Borrow About Two Times of Planned Internally Generated Revenue in 2024

A WikkiTimes review of budget documents has shown that three northeastern states plan to borrow about two times what they plan to generate as internally generated revenue. These three states namely, Bauchi, Borno and Gombe collectively plan to borrow N170.2 billion, they only plan to generate N86 billion.

Internally Generated Revenue of Three Northeastern States
Internally Generated Revenue of Three Northeastern States

While Bauchi state plans to generate N37 billion, it plans to borrow N55.5 billion. N30.8 billion of the loan is planned to be sourced domestically while N24.7 billion is expected to be sourced externally.

Borno also budgeted N27.4 billion for its internally generated revenue but aims to borrow  N41 billion. Domestic debt portfolio is expected to be pushed up by N25.5 billion in 2024, while foreign debt is planned to increase by N16.2 billion in 2024.

Gombe has the highest loan to IGR ratio, with a plan to generate N22.3 billion and borrow N73.7 billion. Of this amount N50 billion is expected to be from domestic sources while N23.7 billion will be from external sources.

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Three Northeastern States to Borrow About Two Times of Planned Internally Generated Revenue in 2024

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Loan as a Percentage of Total Revenue

While Bauchi state plans a revenue of N300.2 billion, 18.4% of the expected revenue is from loans. In Borno state 11.4% of the government revenue is from loans.

32% of Gombe state expected revenue in 2024 is reliant on loan.

It simply means that if the Gombe state government is unable to obtain loans in 2024, 32% of its planned budget for the year will not be executed.

More on Debt Service, Less on Key Ministries

Further review shows that Borno state plans to spend N18.4 billion as debt service in 2024, Gombe plans N21.9 billion, while Bauchi plans to spend N22.3 billion.

In Gombe state, the government plans a total expenditure of N15.6 billion for its health ministry, which would mean it plans more for debt service than health expenditure.

The Borno state government also plans more for debt service than its internal security and information ministry. The sum of N9.6 billion was budgeted for the ministry for the 2024 fiscal year, while Borno plans N18.4 billion for debt service.

The Bauchi state education ministry budget stands at N15.4 billion, meaning that more will be spent on debt service than the education ministry of the state for 2024.

There have been concerns about the loan portfolio of states, with the rising loan as a major source of concern. Recently, Kaduna State governor, Uba Sani was quoted as saying that he is unable to pay salaries due to the volume of loans obtained by his predecessor, El-Rufai.

Other state governors have also denied taking fresh loans, although a WikkiTimes report raised concerns on the validity of their claims.

Northern states have suffered from the challenge of revenue generation, a situation that has become perenial, leading to accumulation of debts and an increase in debt charges.

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