Some states in the South-west region have been listed to be barely sustainable as they ranked poorly in a new fiscal sustainability report released by civic advocacy platform, BudgIT.
The report, which looked into the viability of states in Nigeria, was titled "State of States" and was launched by the civic group last week in Abuja.
According to the report, Ekiti and Osun states ranked 35th and 36th positions respectively in the Fiscal Sustainability Index as the two states were placed on the bottom of the list among the 36 states of the federation.
Oyo and Ondo states were also placed on the 30th and 25th positions respectively while Lagos and Ogun states, however, ranked favourably on the 2nd and 3rd positions respectively.
Apart from Ekiti state which is controlled by the opposition Peoples' Democratic Party, PDP, the other five states in the region are controlled by the ruling All Progressives Congress, APC.
Osun, whose electorate will go to the poll next year, has been governed by APC's Rauf Aregbesola, who got re-elected in 2014 after he ruled for four years following his victory at the elections tribunal in 2010. Ekiti, whose gubernatorial election is also slated for next year, is being ruled by Ayo Fayose of the PDP, who defeated Kayode Fayemi of the APC at the polls in 2014, almost a decade after he was impeached under controversial circumstances as governor.
APC's Abiola Ajimobi of Oyo state and Ibikunle Amosun of Ogun state have been in power since 2011.
On his part, Akinwunmi Ambode of Lagos State became governor in 2015, after succeeding Nigeria's current Minister of Power, Works and Housing, Babatunde Fashola, who governed Lagos for eight years between 2007 and 2015 under the banner of the defunct AC/ACN. Mr. Fashola himself succeeded Bola Tinubu, a chieftain of the APC who ruled the state between 1999 and 2007, under the banner of the Alliance for Democracy, AD--a party that metamorphosed, first, into AC/ACN, and subsequently became a part of the merger that produced the ruling APC.
Lagos, therefore, remains the only state that has been controlled by a single party in the south west region since 1999.
The fiscal sustainability report was prepared based on a review of the 36th states' gross statutory allocation, 13 per cent share of derivation, gross VAT allocation, and internally generated revenue based on 2016 estimate. It also reviewed the states' total estimated monthly revenue after deduction, total debt stock and recurrent Expenditure.
Further analysis of the report revealed that while the South west states performed averagely well in the area of internally generated revenue, IGR, all of the states in the region but Lagos had negative shortfall when the figures were placed against their monthly expenditures.
Ekiti with an average monthly expenditure of N4.59 billion generates a paltry N2.15 billion average monthly revenue and thus records a negative shortfall of N2.44 billion.
Similarly, Ogun records an average N8.5 billion monthly expenditure and generates N8.01 billion, making it record N0.49 billion shortfall. Ondo, Osun and Oyo accumulate N7.93 billion, N6.32 billion and N10.63 billion monthly expenditure while they generate N4.35 billion, N1.37 billion and N4.97 billion average monthly revenue, respectively. This results in Ondo recording negative shortfalls of N3.58 billion; Osun N4.94 billion and Oyo recording N5.66 billion.
Lagos, the only viable state in the region, records N25.44 average monthly expenditure while it generate N32.08 billion, leaving it with a shortfall of N6.64 billion.
In terms of statutory allocation, the South-west states also ranked poorly except Ondo, which was placed on the sixth position in the index with monthly average statutory allocation of N2.8 billion between January and July 2017.
Oyo, which ranked next to Ondo in the index, records average monthly statutory allocation of N2 billion while Ekiti, Ogun and Lagos recorded N1.1 billion, N1 billion and N491 million, respectively.
Osun, which has been battling with salary payments and other debt-related issues in recent months, however, recorded N183 million negative monthly statutory allocation.
HEAVILY INDEBTED STATES
Apart from the huge expenditures of the southwest states which resulted in negative shortfall on the sustainability index, the report also shows that the states rank high on the list of the most heavily indebted states in the country.
On the domestic debt index, Lagos tops the chart with N311 billion domestic debt as at December 2016. It was followed by Osun with N147 billion; Oyo with N115 billion; Ondo with N53 billion and Ekiti with N85 billion domestic debt. For Ogun state, as at December 2015, it had accumulated N75 billion domestic debt.
Similarly, on the external debt index, Lagos sits atop the list with $1.3 billion external debt. It was followed closely by Ogun with $103 million; Oyo with $71 million; Osun with $70; and Ekiti with $56 million external debt. Ondo, which appeared as the least on the index among states in the region, recorded $49 million external debt.
BudgIT, in the report, noted that the "average growth rate of states' debt between 2012 and 2016 remains elevated at 22.16 per cent, while average growth rate of internally generated revenue is 9.04 per cent."
The report then noted that the sustainable part for states is to rein in debt uptake and focus more on improving internally generated revenue.
"State governments, therefore, need to tremendously embrace a high level of transparency and accountability, develop workable economic plans, take haircuts -- especially on overheads -- expand their internally generated revenue (IGR) base, and cut down on debt accumulation without a concrete repayment plan," the report noted.
The Osun State government on Sunday reacted to the Budgit report, saying, "Osun debt profile is put at N179 billion by the NBS. The loan is still within the capacity of the government to access and pay back in a normal economic situation and government has indeed been servicing its debts without public knowledge before the Peoples Democratic Party induced economic recession."