Many Nigerian states will have to rev up their internally generated income and slow down on borrowing, a new Fiscal Sustainability Index published by BudgIT Nigeria, a budget transparency advocacy group has said.
The “2018 State of States’’ report, launched on Tuesday in Abuja by BudgiT, was sponsored by Bill and Melinda Gates Foundation.
The report ranked the 36 states in terms of fiscal stability and ability to cover recurrent expenditure without borrowings, with Rivers, Delta and Bayelsa taking the lead.
Meanwhile, Cross River, Osun and Ekiti emerged at the bottom of the ranking, meaning they lacked healthy financial profile, in terms of ability to cover recurrent expenditure without borrowing.
The Principal Lead, BudgIT, Mr Gabriel Okeowo at the report launch, said their analysis showed that increase in statutory allocations, mainly guided by oil revenues had impacted on the finances of the states in 2018.
“One major highlight of this report is the Fiscal Sustainability Index, which saw a state like Rivers maintaining it’s top position due to its robust revenue profile and manageable recurrent expenditure obligation.
“Lagos dropped from 2nd to 4th place notwithstanding the state’s fiscal advantage, but owning to its unusually high overhead costs and increasing debts.
“We are extremely concerned about the poor fiscal management thinking in Cross River with its bogus budget plan for 2018 of N1.3 trillion, which severely weighed it down on the Index.
“In addition, Cross River lacks the ability to meet its recurrent expenditure obligations due to its heavy debt profile and inefficient IGR collection,’’ he said.
Okeowo said that the report also showed that States needed to commit to a reduction in their operating costs to free up more spending for social and economic infrastructure.
In addition, he said that significant investment was needed to improve the overall economic performance at the state level, which invariably could create jobs.
Also, the Lead Researcher, BudgiT, Mr Atiku Samuel, said that the report did not just focus on the weakness of the states, but also unveiled the export potential of each state.
He said that opportunities in aquaculture, agriculture, manufacturing, trade, logistics and tourism abound across the states, but that the states lacked the rigour and foresight to explore them.
Meanwhile, Miss Chisom Okechukwu, The Associate Programme Officer, Bill and Melinda Gates Foundation, said the foundation invested in the research, to promote efficient use of public finance to reduce poverty. (NAN)