Despite state governments ’ outstanding debts running into trillions of naira , at least 12 states are planning to borrow fresh N1 . 75tn to fund their 2020 budgets , according to investigations by Saturday PUNCH .

This comes just as the latest figure from the Debt Management Office showed that the total indebtedness of the 36 states of the federation stood at N5 , 132 , 521 , 328 , 206 as of June 2019 .

The 12 states that are planning to borrow N1 . 75tn to fund their budgets are Lagos , Cross River , Imo , Taraba, Benue , Abia , Akwa Ibom , Plateau , Bauchi , Enugu, Katsina and Oyo .
The 12 states have projected budgets of N4 . 58tn as their appropriation bills for the fiscal year .

Lagos , which has the highest budget of N1 . 168 tn for 2020 fiscal year, is planning to borrow N97 . 5 bn to fund the budget , following an estimated revenue of N1 . 07tn .
Cross River State, which has the second -highest budget of N1 . 1 tn , will be grappling with a budget deficit of N979 . 84 bn , which it hopes to raise through “ intellectual money . ”
The total revenue that will accrue to the state was put at N120 . 32bn , leaving a deficit of N979 . 84 bn .

Speaking to Saturday PUNCH on how the government will fund the huge deficit , the Special Adviser Media and Publicity to Governor Ben Ayade , Mr Christian Ita , said , “ We will use intellectual money to fill the void. Most states budget without making room for direct foreign investment. They are never captured in the budget . ”

The Enugu State government said it would fund the 2020 budget deficit of N32 . 8 bn through loans .

Governor Ifeanyi Ugwuanyi had presented a N169 . 55 bn budget appropriation bill for the year 2020 to the state Assembly which has passed it into law .

The budget is expected to be funded from estimated Independent Revenue totalling N119 . 88 bn , which includes Internally Generated Revenue , federal allocation or statutory allocation . The state expects N8 . 25bn in grants to fund the budget . The expected total capital receipt was put at N136 . 72 bn .

A breakdown of the expected revenue includes an open balance of N26. 2 bn ; statutory allocation of N65 . 25 bn , while the Independent Revenue is N28. 43bn .

But the state Commissioner for Budget and Planning , Mr David Ugwunta , told one of our correspondents on Friday that the state would fund the 2020 budget deficit through loans .

Ugwunta said, “ We are taking a loan of N30 bn and that loan will fund the deficit . There are domestic loans / borrowing of N32 bn . We have international loans of N9 . 42bn . Those borrowings offset the deficit . ”

He , however , said there were other capital receipts from grants , saying , “ So when you take out those funds , the balance is the deficit .

There is a grant of about N6 . 15bn and another capital receipt of about N2 . 1 bn . ”
The Benue State’ s budget of N189 . 48bn will have a deficit of N96bn , according to information made available .

The draft 2020 budget was premised on an exchange rate of N305 to $ 1 with a crude oil production estimate of 2 . 18 million barrels per day and the crude oil price estimate of $ 55 per barrel .

The state government ’ s share of disbursements from the Federation Accounts Allocation Committee was put at N42. 76 bn , followed by independent revenue of N31 . 88bn and Value Added Tax of N13 . 33bn .

Governor Samuel Ortom said the budget was not always funded with one source , but through various sources , including IGR , which is one of the major sources of budget funding , as well as federal allocations and investments of the state, including loans and grants .

The Chief Press Secretary to Governor Samuel Ortom, Mr Terver Akase , said the state would resort to investment and loan to fund the budget .

He said , “ We have a partnership with United Nations agencies and others which are other sources of government funding to fund budget . So , the budget does not rely on one source alone more also that we are doing everything possible to improve on internally generated revenue.

“ Therefore , it is not only about borrowing to fund the budget, so , the budget would not only be dependent on loan. We will use other means to finance it other than a loan. Loans are just one source of budget funding .
“ However , if the need arises, the government will borrow to finance other important capital projects . If you want to take a bond , for instance , you need that bond for a specific project you go for it , ” he said .

Also , the Taraba State Government is set to borrow more to fund this year’ s budget , according to checks by Saturday PUNCH .
The state government had on December 19, 2019 , presented a budget estimate of N213 . 63 bn to the state House of Assembly for deliberation and passage.

But checks by Saturday PUNCH revealed a deficit of N84 . 85bn as the total revenue, aides and grants in the 2020 budget were put at N128 . 77bn .
Specifically, Governor Darius Ishaku had during the budget presentation said his administration planned a domestic borrowing of N77. 5 bn and an external loan of N7 . 3 bn to service the budget .

When contacted on how the state intended to cover up the deficit , the Senior Special Assistant to the Governor on Media and Publicity , Mr Bala Dan – Abu , said economic experts were already working on how to address the deficit in the budget .
In Oyo , the state government is expected to borrow about N28bn to fund the budget . However , the state indicated on Friday that it would de -emphasise the use of a loan to fund its budget deficit in the current year .

Rather than indulge in the loan as being done in the past , the government said it would explore less strenuous means to fund the 2020 budget of N213 . 78bn which has a deficit standing of 10 per cent of the total budget .
The state Commissioner for Budget and Economic Planning , Mr Adeniyi Farinto , who spoke with one of our correspondents through the Permanent Secretary in the ministry , Mofoluke Adeniyi , said , “ The budget size for the year 2020 is N213 . 78 bn . The budget deficit is just about 10 per cent of the total budget for the current year.

“ The budget is going to be heavily financed through grants . We are going to rely on grants and de -emphasise on loan as much as practicable . Of the total budget for the year 2020 , 48 per cent goes to capital expenditure while 52 per cent is for recurrent. ”

In Katsina , the state projected N249 . 46bn for 2020 , whereas the total revenue expected is N185 . 34bn .
Governor Aminu Masari said during his budget presentation to the members of the state House of Assembly that the budget would be financed through IGR of N12. 24 bn ; other sources of revenue are N34. 09bn and N139 bn receivables from the federation account .

Efforts to speak with Masari ’ s Director -General on Media , Abdu Labaran , to provide further details on the issue were unsuccessful as he did not answer his calls.

The state Commissioner for Finance , Kasim Mutalab , and top officials in his ministry were also said to be attending an official assignment at the Government House as of press time .

In Bauchi State, the total budget of N167 . 21 bn has a deficit of N37. 48 bn . According to a document obtained by one of our correspondents , the budget has an opening balance of N400 m , statutory allocation /excess crude , N57 . 09bn ; VAT , N18 . 77bn ; Independent Revenue , N4 . 79 bn ; aids and grants , N21. 86bn ; and capital receipts of N17bn which culminates to N129 . 75 bn .

The state Commissioner for Budget and Economic Planning , Dr Aminu Gamawa, could not be reached for his comment as he did not answer calls to his phone as of press time .

36 states’ debts hit N 5 . 132 tn
Meanwhile , the total indebtedness of the 36 states of the federation stood at N5 , 132 , 521 , 328 , 206 as of June 2019 , the latest figure from the website of the Debt Management Office showed .
This comprises external loan of N1 , 298 , 497 , 245 , 300 and domestic debt of N3 , 834 , 024 , 082 , 906 . 80 .

Lagos State leads the debtor states with a total of N479 , 047 , 606 , 006 . 32 . Rivers State comes second with N266 , 936 , 225 , 793 . 65. However , the DMO statistics show that the Rivers State debt figure was compiled as of December 30 , 2018 .

Delta State owed N233 , 564 , 158 , 885 . 47 and Akwa Ibom State owed N206 , 414 , 472 , 059 . 83 .
Others are Abia State with a total of N68 , 003 , 077 , 437 . 81 ; Adamawa State, N95 , 219 , 782 , 086 . 14 ; Anambra State, N33 , 431 , 158 , 600 . 07 ( as at March 31 , 2019 ); Bauchi , N97, 502 , 601 , 723 . 17; while Bayelsa State owed N133 , 339 , 375 , 587 . 91 as at March 31, 2019 .

Benue State ’ s domestic debt profile as at March 31 , 2019 stood at N96 , 905 , 502 , 591 . 02 ; Borno State owed N86 , 861 , 555 , 192 . 24 ; Cross River N168 , 819 , 230 , 129 . 37 ; Ebonyi State had N42 , 053 , 162 , 874 . 44 ; Edo State N84002, 644 , 092 . 96; and Ekiti State N86 , 905 , 756 , 443 . 45 .

Enugu State owed N60, 151 , 622 , 506 . 87; Gombe State , N79 , 634 , 209 , 227 . 24 ; Imo State, N148 , 598 , 063 , 157 . 77 ; Jigawa State, N38673, 319 , 242 . 36; Kaduna State owed N97 , 264 , 280 , 664 . 14 ; Kano State, N117 , 339 , 436 , 693 . 47 ; Katsina State owed N66 , 164 , 163 , 901 . 64 ; and Kebbi State, N59 , 598 , 378 , 104 . 63 .

Kogi State owed N105 , 135 , 912 , 916 . 65; Kwara State, N61, 335 , 531 , 821 . 69; Nasarawa State N89, 953 , 619 , 684 . 92; Niger State, N41 , 792 , 519 , 380 . 33 ; Ogun State, N95 , 174 , 172 , 678 . 30 ; Ondo State , N55, 524 , 221 , 404 . 56 ; Osun State, N144 , 804 , 503 , 035 . 23 and Oyo State, N99 , 358 , 565 , 798 . 52 .

Plateau State owed N98, 356 , 193 , 262 . 55; Sokoto State, N33, 509 , 692 , 266 . 79; Taraba State, , N73, 466 , 840 , 201 . 25; Yobe State, N27 , 465 , 573 , 418 . 77 ; and Zamfara State, N61 , 716954 , 035 . 15.

Lagos State is also top on the list of debtor states in external debt with $ 1 , 421 , 234 , 576 . 50 as at June 30, 2019 ; Edo State owed $ 77 , 735 , 972 . 77 and Kaduna State, $ 223 , 760 , 252 . 12 .

Abia State owed $ 98, 028 , 292 . 33; Adamawa State, $ 100 , 613 , 674 . 40; Akwa Ibom State, $ 44 , 935 , 625 . 88 ; Anambra State, $ 111 , 783 , 998 . 80; Bauchi State, $ 133 , 705 , 364 . 22; Bayelsa State, $ 56 , 154 , 690 . 84 ; Benue State, $ 33 , 936 , 861 . 92 ; and Borno State, $ 21 , 313 , 198 . 49 .

Cross River State owed $ 192 , 730 , 721 . 41; Delta State, $ 62 , 952 , 056 . 49 ; Ebonyi State, $ 76 , 044 , 993 . 97 ; Ekiti State, $ 104 , 771 , 792 . 18; Enugu State, $ 125 , 351 , 839 . 26; Gombe State, $ 36 , 960 , 036 . 41 and Imo State with a debt of $ 68 , 812 , 739 . 83 .

Jigawa State owed $ 31 , 550 , 317 . 67 ; Kano State owed $ 62, 219720 . 77 ; Katsina State, $ 61 , 082 , 288 . 27 ; Kebbi State, $ 44, 918 , 042 . 07; Kogi State, $ 31, 111 , 476 . 95; Kwara State, $ 47 , 961 , 939 . 95 ; Nasarawa State, $ 63 , 768 , 296 . 18 ; Niger State , $ 65, 190 , 776 . 88, Ogun State, $ 102 , 154 , 285 . 23 ; Ondo State, $ 78 , 980 , 779 . 09 ; Osun State, $ 97, 496 , 310 . 66 and Oyo State, $ 136 , 531 , 758 . 12.

Plateau State owed $ 28 , 491 , 926 . 97 , Rivers State, $ 80 , 915 , 343 . 53 ; Sokoto State, $ 36 , 594 , 539 . 81 ; Taraba State, $ 21 , 316 , 143 . 05 ; Yobe State’ s external debt stood at $ 27, 242 , 586 . 26 and Zamfara State, $ 33 , 101 , 729 . 89 .

28 states budget N 8 . 25tn for 2020
Meanwhile , at least 28 states have budgeted N8 . 25tn for capital and recurrent for 2020 .
The states are Lagos , Rivers , Ebonyi , Osun , Enugu, Oyo , Plateau , Adamawa , Kwara , Akwa Ibom , Ondo , Delta , Abia , Katsina , Benue , Cross River , Lagos , Sokoto , Ogun , Taraba, Ekiti , Imo , Kaduna , Kano , Zamfara , Bauchi , Niger , and Yobe for the fiscal year.

Rivers State Governor Nyesom Wike said the 2020 budget of N530 . 81bn was for the sustained development of the state. The Rivers State 2020 budget has a total recurrent expenditure of N156 . 659 bn , while capital expenditure is N374 . 15bn .

Governor Dapo Abiodun of Ogun State also signed the state’ s N449 . 97 bn 2020 appropriation bill into law . Giving the breakdown of the budget , the governor said N269 . 132 bn , representing 60. 31 per cent , was proposed for capital projects , while N180 . 842 bn or 39 . 69 per cent was set aside for recurrent expenditure .

The Ebonyi State Governor David Umahi budgeted N178 . 14bn for the 2020 fiscal year. The recurrent expenditure of N46 . 08bn represents 25 . 87 per cent of the total budget , while capital expenditure of N132 . 07 bn , representing 74 . 13 per cent of the total budget .

In Osun State, Governor Adegboyega Oyetola earmarked N119 . 55bn as the 2020 appropriation bill. Recurrent expenditure was put at N57. 674 bn , while the capital expenditure was put at N61 . 875 bn .

Source:- Punchng