EXCLUSIVE: How Three Northwestern States Plan To Borrow over N240 Billion
A WikkiTimes review of select Northwestern states 2024 budget has shown that three states plan to borrow N240 billion in 2024.
The states reviewed for this report are; Katsina, Kano and Kaduna.
Review shows that the Loans/borrowings receipt for the 2024 approved budget stands at N150.067 billion.
Kano plans to borrow N25.065 billion while Katsina has a planned N65.83 billion for loans and borrowings in 2024.
For Katsina state, domestic loans are expected to amount to N15 billion while international loans/borrowings will amount to N50 billion. Katsina state expects to borrow from financial institutions.
Kaduna state plans to borrow all of its N150 billion from international sources.
Impact of Planned Loans on States Public Debt Portfolio
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If the states fully execute their plans on loans, it would push up their loan portfolio.
For instance, if Kaduna state borrows N150 billion, it would add another N150 billion to its already loan portfolio.
Kaduna State current domestic debt stands at N85 billion, katsina N99 billion, N122 billion.
Kaduna external debt stands at $582 million, Katsina $50 million, Kano $107 million.
Collectively, the three states plan to spend N46 billion on debt service in 2024. Kano (N4.6 billion), Kaduna (25 billion), Katsina (N17 billion).
What States Plan as IGR, Loan and Total Revenue
Review shows that only Kano plans to generate more from Internally Generated Revenue than loans. Kaduna plans to generate N120 billion, but plans a loan of N150 billion. Katsina plans to generate N40 billion but plans to borrow N65 billion.
However, Kano plans to generate N101 billion while borrowing N25 billion.
Further review shows that Kaduna plans to source 34% of its revenue from loans. Katsina plans 14% from loans while Kano plans 5.9% of its revenue in 2024 from loans.
The Challenge of Debt
There have been concerns about the loan portfolio of states, with the rising loan as a major source of concern. Recently, Kaduna State governor, Uba Sani was quoted as saying that he is unable to pay salaries due to the volume of loans obtained by his predecessor, El-Rufai.
Other state governors have also denied taking fresh loans, although a WikkiTimes report raised concerns on the validity of their claims.
Northern states have suffered from the challenge of revenue generation, a situation that has become perenial, leading to accumulation of debts and increase in debt charges.
