WIKKIDATA: Four Charts Explaining Problem with Katsina’s N4.2 Billion Three Months Debt Servicing

Katsina state has spent the sum of N4.2 billion on debt servicing in the first three months of 2024. Debt charges are incurred as an obligation from loans obtained by the state government.

Katsina state has spent the sum of N4.2 billion on debt servicing in the first three months of 2024. Debt charges are incurred as an obligation from loans obtained by the state government.

According to data by the debt management office, as of December, 2023, the debt profile of Katsina stood at N99 billion. With the new N20 billion borrowed by the state in the first three months of 2024, it would mean that its profile is expected to rise to N119 billion.

The danger is, the more the loan, the more the debt charges.

These charts below, explains the problem with the N4.2 billion spent on debt servicing in the first three months of 2024.

Problem 1: Katsina Spent More on Debt Service Than It Did for Critical Sectors

Health, education and water resources got lesser financial commitments than debt service.

Per the multi-dimensional poverty index released by the national bureau of statistics,school attendance in the state stands at only 51.1%. Water reliability is put at 31.1%.

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Poor and out of school children stands at 44.7% per the report.

These data and words from experts show the need to invest in these sectors more, a need that may be denied by debt servicing expenditures.

Katsina state has spent the sum of N4.2 billion on debt servicing in the first three months of 2024. Debt charges are incurred as an obligation from loans obtained by the state government.

Problem 2: Katsina spent equivalent 66.6% of its internally generated revenue on debt service in the first three months of 2024. Meaning that assuming that IGR was the only available revenue of the state, it would only have N2.1 billion left to run the state for first three months of 2024. 

Problem 3: Katsina state spent equivalent 39.2% of it spent on personnel expenditure on debts servicing. 66.6% of what the state spent on capital expenditure was also spent on debt servicing.

This is despite the capital needs of the state.

Problem 4: The money spent by Katsina state can help it substantially in terms of its capital needs. For instance, 420 computer labs at a rate of N10 million each can be built throughout the state.

a 250 seater lecture hall at N100 million each can also be built. The money is 24-times the N200 million budget of the state for construction and expansion of schools.

The director of accountability lab, Friday Odeh, had told WikkiTimes that northern state have to deploy technology to improve their chances of better revenue, instead of relying on loans. Experts have also warned that piling loans can be dangerous for states development.

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