States’ IGR can’t clear N7.33trn debt in 7 years

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If states decide to clear their total debt stock using their entire internally generated revenues (IGR), it may take them more than seven years to achieve that.

Data sourced from the National Bureau of Statistics (NBS) showed that as at the end of 2017, states’ total debt stock stood at N7.33 trillion while total IGR stood at N931.23 billion.

Analysis shows that the entire revenue generated internally by the 36 states in the country in 2017 was 12.69 per cent of their total debt stock as at the end of 2017.

All things being equal, states will require about eight years to settle the debts using about N916 billion yearly from their IGR.

However, given that only few states can survive with only their IGR, allocations from the Federal Government can only reduce the debt payment duration to three years assuming the states want to spend all their IGR and FACC allocations to off-set their loans.

In 2017, the 36 states of the federation got N1.74 trillion from the federation account and this, in addition to their IGR, brought their total revenue to N2.67 trillion, which only amounted to 36 per cent of their total debt stock as at the end of the year under review.

The states’ total debt stock of N7.33 trillion at the end of the year was N4.66 trillion higher than their total revenues in the same year.

Analysis showed that all things been equal, states would require three years to clear their total debt stock using all revenues from IGR and FACC allocations.

The total debt stock comprised of external debts and domestic debts while the total revenue included revenues from net FACC allocations, and Internally Generated Revenue (IGR).

A breakdown of the N7.33 trillion debt stock of the states indicated that their external debts amounted to N1.47 trillion (N4.08 trillion) while domestic debts stood at N3.25 trillion at the end of 2017.

A breakdown of the N2.67 trillion total revenue of the states in 2017 showed that they got N1.74 trillion from FACC allocations and generated N931.23 billion internally.

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Godwin Okafor is a Financial Journalist, Internet Social Entrepreneur and Founder of Naija247news Media Limited. He has over 16 years experience in financial journalism. His experience cuts across traditional and digital media. He started his journalism career at Business Day, Nigeria and founded Naija247news Media in 2010. Godwin holds a Bachelors degree in Industrial Relations and Personnel Management from the Lagos State University, Ojo, Lagos. He is an alumni of Lagos Business School and a Fellow of the University of Pennsylvania (Wharton Seminar for Business Journalists). Over the years, he has won a number of journalism awards. Godwin is the chairman of Emmerich Resources Limited, the publisher of Naija247news.

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