By; YUSUF ISHAKU GOJE
The Kaduna State 2024 approved budget shows that the incumbent administration will be servicing the State’s inherited debt with about N25.4 billion.
However, it also shows that it seeks to borrow another N150.0 billion this year. Out of which N144.3 billion is multilateral and N5.7 billion is bilateral loans. This is about 33% of the total budget of N458.3 billion.
Furthermore, it is higher than the expected Independent Revenue of N120 billion, and Government Share of FAAC of N141 billion. Also, it is N47.2% of the total capital expenditure of N317 billion for the year.
Therefore, in view of the above, to narrow the debate on Kaduna’s debt stock into a political war between the camp of the current governor and that of his predecessor is misplaced priority. Available evidence shows that the incumbent Governor, Senator Uba Sani, supported and defended the borrowings that happened under his predecessor. Likewise, as seen in the first paragraph, the 2024 approved budget shows the incumbent Governor, just like his predecessor, has also towed the same path of external borrowing.
More so, the news angle from which the debt issue is being reported by the media and some promoters of the Governor is counterproductive to him. The Governor cannot in any way absolve himself from the borrowings that happened under his predecessor. Keen observers will recall that the Governor was engaged using some of the data on our debt stock, during the gubernatorial campaigns, and he confidently defended the borrowings.
He was even reported before then to have challenged that he should be held responsible if his predecessor failed to effectively utilize the borrowings.
The Governor is in a better position to know that there is nothing new in the figures he reeled out during the meeting with stakeholders on Saturday.
The Fitch Ratings report for 2023 had already warned that, “The ‘Vulnerable’ risk profile (of the State) reflects a very high risk relative to international peers that Kaduna’s ability to cover debt service with its operating balance may weaken unexpectedly over the forecast horizon (2023-2027). This may be due to lower-than-expected revenue, higher-than-expected expenditure, or an unexpected rise in liabilities or debt or debt-service requirements.”
Aside from the fact that the incumbent Governor was an influential stakeholder in the last administration, more importantly, government is a continuum. Evidently, that is why the Governor titled his blueprint – SUSTAIN agenda and campaigned to continue and consolidate on the successes of his predecessor. Back to the focus of this write up, firstly, it is commendable that the Governor of Kaduna State through a town-hall meeting updated stakeholders on the state of the fiscal (financial) position of the State. The social contract of nurturing citizens’ engagement in the SUSTAIN agenda is one promise being kept so far.
Secondly, in the Governor’s speech five germane issues stood out for me and are not being adequately debated, instead, the focus is on politicizing the debt burden inherited. The key points of public discussion from the Governor’s speech should actually be: that there will be monthly deductions of about N7 billion; the State cannot pay salary without borrowing about additional N2 billion to complete the N5 billion wage bill; for some of the projects to be completed, the State will have to spend N115 billion – probably they will be abandoned; the little revenue after payment of salary will be going into rural roads; and there was no clear direction in the speech on how the debt crisis will be addressed – except hoping on the imprecise benevolence of the President and the Governor’s colleagues.
To this end, beyond lamentation and politics of blame game, the only way out for the State government is to review and further reform its revenue generation capacity. Equally, it is important to go beyond the tokenism of dishing out money to micro and small businesses to create the enabling environment to expand the State’s revenue base.
Therefore, it is high time the state government convenes a public policy dialogue on revenue generation and ease of doing business for micro and small enterprises.
Lets engage, ask the right questions and hold the government accountable.
Goje is an active citizen, civil society actor and OGP enthusiast.
