Post Views: 555 • As Rivers, Delta, Bayelsa Top • Amidst Dismal Outing By Cross River, Osun, Ekiti Civil society and social advocacy group, BudgIT say...
• As Rivers, Delta, Bayelsa Top
• Amidst Dismal Outing By Cross River, Osun, Ekiti
Civil society and social advocacy group, BudgIT says seven states emerged champions in the 2018 editional of its Fiscal sustainability index, due to their robust revenue profile and manageable recurrent expenditure obligation.
A statement by Ayomide Faleye, Communications Lead at BudgIT listed the states as: Rivers, Bayelsa, Delta, Akwa Ibom, Lagos, Edo and Ondo.
While analysing the fiscal condition of the 36 states in the country, it noted a general improvement in their fiscal accounts on the back of increasing oil revenue, while urging the various sub-national governments to embrace a high level of transparency and accountability. It also challenged them to “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 singled out Lagos, which dropped from second to fourth place on the index, despite its economic advantage and internally-generated revenue (IGR), which when compared to many of its peers, is relatively high.
“Her IGR as at the end of 2016 was N287bn, from 2015 levels of N268.2bn. In 2018, the State is planning a Recurrent expenditure spending of N305bn or N25bn monthly. With its IGR not expected to grow significantly above N300bn, while its share of revenue from FAAC in the first six months of 2017 was N6.6bn, Lagos’ overheads cost and debt is unusually elevated, weighing down on its revenue and its performance on the 2018 fiscal sustainability index,” BudgIT added
It commended states with low expenditure outlay and sizeable debt like Anambra, Enugu and Katsina, as well as Abia which had tightened its recurrent projection, providing it with the opportunity to leap on the sustainability rankings.
BudgIT however lamented the situation of Osun State, which it warned is not out of the woods, ranking a distant 35 out of the 36 states, even as it prepares for elections to produce a successor to Governor Rauf Aregbesola on Saturday, September 22, 2018.
The report, nonetheless, expressed extreme concern about the poor fiscal management thinking in Cross River, which made news when it set bogus plan of N1.3tr in its 2018 budget, a situation that severely weighed it down on the index.
“The Research concludes that States need to look beyond rhetorics and commit to a reduction in its operating costs, including significantly slashing its unreasonable overheads bill while freeing up more spending for social and economic infrastructure.
“States also need to link future borrowing to sustainable projects, which can pay back the capital cost of its current loans and improve the overall income profile of the state,” BudgIT added, urging economic planners at state levels to improve tax collection efficiencies and realign budgeting with statewide plans.
It called for significant investment to improve the overall economic performance at the state level, a situation that will invariably “create jobs that feed into states’ internally generated revenue. Improve spending is also critical for value-added tax revenue. Export Opportunities in aquaculture, agriculture, manufacturing, trade, logistics and tourism abound across states, but it seems states lack the rigour and foresight to explore them.”