With Massive N5.3trn Debt Stock, FRC Urges States To Stop Borrowing, Grow IGR  

As Nigeria grapples with the burden of debt, the 36 states and the federal capital territory in the country have been charged to look inward to grow their internally generated revenues to run and develop rather than accumulating more debt.

LEADERSHIP checks reveal that that 36 states and the federal capital territory are currently saddled with a whopping debt profile of N5.3 trillion as at June 30, 2022, according to the Debt Management Office (DMO).

On the other hand, data from the National Bureau of Statistics (NBS) revealed that the 36 states of the federation and the FCT were only able to generate N1. 89 trillion as internally generated revenue (IGR) in 2021.

Speaking on the low level of IGR in relation to expenditures, the executive chairman of the Fiscal Responsibility Commission (FRC) Mr. Victor Muruako stressed that concerted efforts must be made by the states and FCT to increase their IGRs in order to reduce their current levels of debt.

Muruako, while speaking at a technical assistant to sub-nationals workshop with the theme ‘Strengthening Fiscal Management at State Level’ in Lagos yesterday

RELATED

FirstBank Partners UNGC To Bridge SDG Financing Gap

12 hours ago

Stockbrokers To Discuss Economic Growth Strategies

12 hours ago

Muruako whilst urging for more focus on increasing internally generated revenue (IGR), also called on states to also maintain the transparency and fiscal responsibility that came as a conditionality of the World Bank funded State Fiscal Transparency, Accountability and Sustainability (SFTAS) programme which is ending next month.

“I appeal today to state governments to show fatherly love to their citizens by investing energy in improving their revenue base. It is hard love, much like an African father’s love; and it is certainly better than using wallpaper to cover fiscal cracks by readily resorting to borrowing despite the existence of untapped potential for internally generated revenue. Again, we commend state governments that have taken the business of governance seriously enough to institute systems for planning, growing, harvesting and accounting for their IGR, all in a manner that is clear to their citizens, transparent to stakeholders and accommodates citizen participation.

“While the Commission acknowledges the many gains recorded in the nation’s fiscal ecosystem through the World Bank funded State Fiscal Transparency, Accountability and sustainability (SFTAS) programme, we are disturbed that as the programme closes out next month, there isn’t yet sufficient institutionalisation of adherence to fiscal rules and the active involvement of citizens  that will ensure the sustainability of the gains of SFTAS.”

He noted that adherence to fiscal rules must be continually emphasised to banks and financial institutions in Nigeria and urged that banks must obtain Proof of Compliance with provisions of the Fiscal Responsibility Act 2007, as provided in its Part X, Sections 44 and 45, before lending to any government in the federation.

“This triangulation of checks between the DMO, the Federal Ministry of Finance and the FRC will ensure better filtration of public loan intentions.

Regarding the active involvement of citizens on whose behalf governance is carried out, the Fiscal Responsibility Commission is not satisfied with the extent to which citizens are accepting ownership of fiscal processes.

“Thanks to SFTAS and other measures, state governments and federal agencies have gone ahead of the questions of their citizens and stakeholders to provide copious data and information on public debt, expenditure and revenue.

available online and can be accessed from any village or city on the globe. The problem now is that citizens are not measuring up with their consumption and interrogation of these materials.”

Furthermore, on Nigeria’s debt, he added: “Much as public debts can be beneficial tools for a visionary government to drive development beyond its immediate means, there is a need to carefully identify, situate and manage the risks of poor transparency and accountability often associated with public debts, borrowing and loans.

“One of such risks is the one associated with easy recourse to debt for purposes of funding state expenditure, as against rigor in building and harvesting a local revenue base.”