Bailouts Reveal Precarious Finances of Nigerian States (By Akinrinde, Ibukunoluwa Jeremiah)

Email: ibukunoluwaakinrinde@gmail.com

Twitter: @IbukunoluwaIbk

Although the total domestic debts of the 36 states of the federation for 2015 has not been disclosed by the DMO; press sources revealed that as at the Q4 2015, the Nigerian state governments owed DMBs an excess of N600 billion, the CBN injected a N338 billion bailout fund and a total credit of N1.2 trillion was issued by the Federal Government (FG) to financially 27 distressed states. Also in 2014, N4,810 billion total debts (domestic debts — N1,545 billion; external debts — N3,265 billion) of the 36 states released by the Debt Management Office (DMO).

The latest NBS release of 2015 IGR showed that IGR reduced significantly in Kwara (-73.57%), Imo (-48.3%), Yobe (-36.53%), Bayelsa (-25.76%), Jigawa (-23.46%), etc. Most states with low IGR are largely dependent on the declining Federal Allocation. For the states to meet their payment obligations (recurrent and developmental), it is important for them to generate higher IGR through automation of tax collection (to ensure transparency), real-time database of taxpayer registration, interagency collaboration, taxpayer education, etc.

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