AAnambra State Ranks 2nd in latest sustainability index Anambra has been ranked the second best state after Rivers in 2020 states’ fiscal sustainability index.
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The states sustainability index just released by a Communication Associates on behalf of BudgIT placed Ogun and Lagos States as third and fourth respectively.
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Bayelsa, Osun, Ekiti and Plateau States occupy the least positions in the ranking according to the report.
The latest 2020 edition of the annual States of States report has been titled: “Fiscal Sustainability and Epidemic Preparedness Financing at the State level’’.
“This report is BudgIT’s signature analysis that provides policy makers with robust insights on ways to implement financial and institutional reforms that will improve fiscal performance and sustainability level of states.’’
BudgIT is a civic advocacy society that uses technology to intersect citizen’s engagement with improved governance.
It noted that soaring debt burden, imprudent fiscal planning and nearly a decade of misplaced expenditure priorities without a doubt had beaten a clear path to fiscal crisis for many states.
From the 2020 State of States analysis, 13 states were unable to fund their recurrent expenditure obligations together with their loans repayment schedules due in 2019 with their respective total revenues.
The worst hit of these 13 states are Oyo, Kogi, Osun and Ekiti States while the other states on this pendulum are Plateau, Adamawa, Bauchi, Gombe, Cross River, Benue, Taraba and Abia.
It said that of the remaining 23 states that could meet recurrent expenditure and loan repayment schedules with their total revenue, 8 of those states had really low (less than N6bn) in excess revenue that they had to borrow to fund their capital projects.
The worst hit states are Zamfara, Ondo and Kwara who had N782.45m, N788.22m and N1.48bn left, respectively
“Based on their fiscal analysis, only five states — Rivers, Kaduna, Akwa Ibom, Ebonyi and Kebbi states – prioritised capital expenditure over recurrent obligations while 31 states prioritised their recurrent expenditure according to their 2019 financial statements.
“Recurrent expenditures are not necessarily a bad thing, especially when skewed toward sectors like Health and Education.
“However, nine of the states in this category had overhead costs that were larger than their capital expenditures.
“These states are Ekiti, Kogi, Kano, Plateau, Kwara, Nassarawa, Taraba, Adamawa and Benue,’’ said Abel Akeni, BudgIT’s Lead Researcher.
The report adds: “all 36 states’ debts surged by 162.87 per cent (?3.34tn), from ?2.05tn in 2014 to ?5.39tn in 2019, with 10 states accounting for approximately half or ?1.68tn of this increase.
“Seven of these states are from the Southern parts of the country, while three are from the North.
“To achieve fiscal sustainability, states need to grow their Internally Generated Revenues (IGR) as options for borrowing are reduced due to debt ceilings set by the Federal Government to prevent states from slipping into a debt crisis.
“There has to be a shift from the culture of states’ overdependence on Federal Accounts Allocation Committee (FAAC),’’ said Damilola Ogundipe, BudgIT’s Communications Lead
On sub-national epidemic preparedness, the group said: “it is important for states to prioritise health financing especially on Water, Sanitation and Hygiene (WASH).
“While COVID-19 pandemic has garnered major attention in the last few months, it is worthy of note that states are currently battling at least 6 other deadly diseases which already have vaccines or known treatment.
“In 2019, all 36 states recorded 94,500 cases of the deadly Cerebrospinal Meningitis (CSM), measles, Lassa fever, yellow fever, monkey-pox and cholera combined.
“It is in the self interests of state Governments to grow their IGR and also invest in appropriate health systems through their budgets and other sustainable methods’’.
BudgIT’s Principal Lead, Gabriel Okeowo, notes that although some states had seen some improvements in their IGR between 2014 and 2019, there was still a need to put systems in place for aggressive IGR growth within the sub-national economies.
“This is especially as falling crude oil prices, OPEC production cuts and other COVID-19 induced headwinds are set to impact Federal Allocations over the next two years.
“This paints a bleak outlook for Nigerian states that depend on FAAC allocation for their survival, even though dwindling revenues will affect all states differently.
“Three states, Bayelsa, Borno and Katsina will be worst hit by dwindling revenue as they relied on Net FAAC for 89.56 per cent, 88.30 per cent and 88.16 per cent of their total revenues, respectively in 2019.
Lagos, Ogun and Rivers state would be least affected as they rely on Federal Allocation (Net FAAC) for only 22.82 per cent, 35.31 per cent and 53.02 per cent of their total revenues, respectively. Source Anambra State Government