Only four states in Nigeria can pay salaries without resorting to lending, a new report by BudgIT, a civil society organisation, has shown. The report, State of State 2017, was launched on Thursday and released to the public on Friday.
Important is states’ ability to meet their recurrent expenditure obligation with all revenue source — a test of prudent fiscal management. Kano, Katsina, Rivers and Lagos top that portion of the index.
In effect, only four states could meet their recurrent expenditure obligation without resorting to borrowing or tapping donor funds and other extra-budgetary revenue sources. The effect of huge debt supported by ISPOs is already eating deep into the account of Lagos, Cross River and Osun states. Osun’s net allocation is even in the negative terrain, which invariably puts more pressure on future revenue.
Also, the index looks at the ability of states to sustainably manage their debt profiles. The index tries to see the extent to which today’s revenue can service outstanding debts. Anambra and Yobe top the index. Osun trails the overall index. The state’s inability to meet its recurrent expenditure obligations, its heavy debt profile and inefficiency in the collection of internally generated revenue weighed seriously on the state.
No comments:
Post a Comment