A WikkiTimes review of Bauchi state loan portfolio has shown that the state has spent substantial parts of its internally generated revenue on servicing loans in the last eight years.
This is based on the study of its budget performance reports.
As of 2021, the state spent an equivalent 72% of its IGR on public debt charges. The percentage jumped in 2022, when an equivalent of 94% of the IGR it made was expended on debt servicing.
In 2023, the state spent 70.5% of its IGR on public debt charges, review shows.
Bauchi Domestic Loan Profile Rises by 134% as External Loan Grows by 75% in Eight Years
Further review shows that the external loan portfolio of the government has grown considerably in the past eight years.
In 2016, the loan portfolio of the state stood at $97.174 million, however, it has continued a steady increase, rising to $170.438 million as of June 2023, according to data published by the debt management office.
Th domestic loan also grew by 134%, rising from N69 billion to N162 billion between 2016 and 2023.
Bauchi Borrows N97.049 Billion from Financial Institutions in Three Years
WikkiTimes study of budget performance reports of the state shows that the sum of N97.049 billion was borrowed from domestic financial institutions within three years (2021-2023).
Bauchi state in 2023 borrowed the sum of N53.690 billion from local financial institutions and raised another N11 billion from capital markets.
The state borrowed N20 billion in 2022 from domestic financial institutions and another N24 billion from other domestic sources.
In 2021, Bauchi sourced loans worth N23.359 billion from financial institutions.
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Bauchi, Outlier State on Loans
WikkiTimes earlier reports noted that Bauchi is a majorly indebted state in the northern region of the country. The state is the third highest indebted states for domestic debts in the country, only behind Benue and Plateau.
In terms of foreign debt, Bauchi is also high ranking among states in the country.
Impacts of Debt Servicing, High Loan Portfolio
WikkiTimes analysis shows that Bauchi state investment in public debt servicing may be denying other key sectors of needed revenue to work.
Already experts have worried that continual borrowing by states will have fiscal impacts on developments in critical sectors of these sectors.
A socio-economic group, SERAP had earlier in 2023, asked the world bank to suspend all loans to states, stating that it should investigate the issue of fund diversion by these states.
A WikkiTimes report had shown that Bauchi spent more on public debt charges than it spent on key capital needs for the 2023 fiscal year.
