22/10/2021
LEAKED DOCUMENT: IMO DOMESTIC DEBT PROFILE DOWN BY 28.15% (Photos)
The cumulative domestic debts of Imo and other states fell by 28.15 per cent between December 31, 2015 and August 31, 2021, analysis of data obtained from the Debt Management Office has shown.
According to the leaked document obtained by Nigerian News Daily, each of the states in question recorded at least 25 per cent decrease in less than the two years under review.
However, in general, the 36 states of the federation and the Federal Capital Territory Administration recorded an increase of 64.8 per cent in their domestic debts within the years under review.
The total domestic debts for the 36 states and the FCT stood at N2.50tn as of December 31, 2015. However, by March 31, 2021, the debts had gone up to N4.12tn.
A former Commissioner for Finance Imo State, Prof. Uche Uwaleke, stated that the debt burden may be as a result of low FAAC allocation to each state and the need to meet up with certain financial responsibilities.
He said, “I think the situation can be blamed on the drop in FAAC allocation as most states in the federation depend on FAAC distribution.
“The drop in FAAC was due largely to collapse in oil revenue in 2015/16 and drastic fall in government revenue again in 2020 due to COVID-19. Recall that the Nigerian economy was in recession during these periods.”
He said revenue shortfall in many states was aggravated by weak revenue base and poor IGR effort.
Uwaleke added, “On the spending side is the fact that many of the heavily indebted states have huge recurrent expenditure involving personnel costs and overheads.
“The periods of economic recession made it difficult for many states to downsize civil servants in order not to create social crisis.
©️NigerianNewsDaily