By; YUSUF ISHAKU GOJE
The Kaduna State government had budgeted to expend N35.4 billion to service its debt burden in 2023. A further breakdown shows that N25.8 billion is to service our foreign debt, while N9.5 billion will go for domestic debt. In the light of the above, between January and September, the State has so far expended N21.6 billion on debt service, which is 61% of the total budgeted amount – with a balance of N13.8 billion. Out of the expended amount, N13.4 billion was used to service our foreign debt, while N8.2 billion was expended on domestic debt, a 51.9% and 85.5% performance respectively.
The N21 billion expended for debt service versus revenue performances is 27.7% of Government Share of FAAC, 36.1% of Statutory Allocation, 66.6% of Share of VAT, 55.1% of Independent Revenue and 71.5% of Tax Revenue. The amount is also higher than performance for Non-Tax Revenue, Aid and Grants, Other Capital Receipts and International Loans/Borrowing Receipts. This should be a source of concern not just for the government but residents of the State. As this is evident with the low total revenue and expenditure performances of 43% and 40% respectively, year-to-date.
A deep dive into the revenue performance further reveals a lot as at the third quarter. The performance of total revenue (including Open Balance) was 43%, that is N165.1 billion out of the budgeted N376. 4 billion. On the other hand, only N157.4 billion of the budgeted N333.8 billion for total revenue (excluding Opening Balance) was realized, a 47% performance. A disturbing observation is the 18.1% performance for opening balance (N7.7 billion out of the N42.6 billion budgeted). This is an amount that is expected to be available at the beginning of the fiscal year, left-over from the previous year. We look forward to government’s explanation on this.
The highest revenue performance was from Government Share of FAAC, with N78.0 billion out of the budgeted N94.1 billion realized, a performance of 82%. The performance breakdown of which are Statutory Allocation with 61.3% and Share of VAT with 105.5% respectively. However, Independent Revenue fell short of expectation in the same period, with 44% performance, which is N39.2 billion out of the budgeted N89.2 billion. Disturbingly, Capital Development Funds (CDF) Receipt performed poorly, with only N24.7 billion realized out of the budgeted N93.8 billion – that is 26% performance.
A further deep dive into revenue performance leaves a lot to be worried about. Only the Ministry of Finance and Kaduna Internal Revenue Service (KADIRS) had impressive performance of 78% and 71% respectively. However, it is worrisome that out of about 55 revenue generating MDAs – 44 had less than 50%, 29 had less than 10% and 16 had 0% performances. This validates the opinion of the Auditor-General of the State, in the 2021 and 2022 reports, that “the revenue forecast of the State appears to be exaggerated or too bogus to achieve. Most MDAs were unable to meet their revenue target.”
Ironically and disturbingly so, some MDAs are spending without generating a dime of revenue. For instance, the three Metropolitan Authorities generated zero naira out of their target revenue of N4.3 billion; but combined, had expended N13.9 billion out of its total expenditure of 19.8 billion, a 70% performance in the same period.
Therefore, the government must go back to the drawing table to review its fiscal policy, particularly on non-tax revenue generation capability and debt sustainability. Going forward, realistic budgeting should now be the ultimate goal, especially in ensuring alignment with the Medium Term Expenditure Framework (MTEF, 2024-2026) budget size recommendation. The State government needs to also take its austerity measures a step further by cutting down more on the cost of governance and by strictly allocating the available revenue to strategic development priorities.
Lets engage, ask the right questions and hold the government accountable.
Goje is an Active Citizen, member of the Civil Society and OGP Enthusiast
