A WikkiTimes review of budget performance reports have shown that two northwestern Nigeria states have again borrowed a total of N22 billion in the first three months of 2024.
This development is despite concerns on the need for states to prune down their reliance on loans as a source of revenue.
The review shows that Kaduna state borrowed the sum of N2.2 billion in the first three months of 2024 while Katsina amassed the sum of N20 billion.
States such as Kano, Kebbi, Zamfara and Jigawa did not borrow any money in the first three months of 2024, per budget performance report review.
A WikkiTimes review further shows that what Katsina state borrowed in the first three months of 2024, is three times what it made internally. For instance it made the sum of N6 billion as Internally Generated Revenue in the first three months of 2024, while borrowing N20 billion.
Loan is 54% of the total revenue (FAAC plus IGR) it made in the first three months, meaning that for every N10 it made , N5.4 was borrowed by the state.
Heavy Loan, Hgh Debt Service Charge
The high loan portfolio of these states come with obligation to service debts. In the first three months of 2024, Katsina state spent N4.2 billion on debt charges while Kaduna state spent the sum of N16 billion on debt charges in the same period.
Data shows that if Kaduna state continues to spend on debt charges the same way it started in the first quarter, it would end up spending N64 billion at the end of the year. This is more than N25 billion it budgeted for the same purpose for the 2024 fiscal year.
Katsina may spend N20 billion on debt servicing, if its pattern of debt charges continues.
More On Debt Charges Than Developmental Needs
Review further shows a concerning pattern of expenditure by these two states .
Katsina has been reported to suffer water crises on different occasions, however despite this, its ministry of water resources only spent N300 million in the first quarter as total expenditure, far below the N3 billion expended on debt servicing.
The health ministry also spent N2.5 billion in the first quarter of 2024, meaning that more was spent on debt servicing than the health sector.
Basic and secondary education also gulped N3.3 billion as against N4 billion expended on debt charges.
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