" />
Published On: Sat, Oct 28th, 2017

‘Edo must justify rising debt profile with investment in infrastructure’

By FELIX OLOYEDE

The Governor Godwin Obaseki administration has to continue from where his predecessor, Comrade Adams Oshiomhole stopped in improving the state of infrastructure in Edo State to justify its rising debt profile. Edo State has the third highest external debt burden in the country just behind Lagos State and Kaduna State which are first and second respectively in the debtor’s list among states.

Edo state’s external debt has been on the upswing since 2014 and stood at $214 million as at June 2017, 19.18 per cent higher than the $180 million it owed foreign creditors in 2016. It currently owed five per cent of the total state foreign debts in the country. However, the state domestic debt, which was N45.09 billion as at June 2017, has been stable in the last one year. And should the state’s 4,109,499 population share its N522. 21 billion debt total, each of them would be indebted to the tune of N127, 073.30.

The Governor Obaseki administration which took the rein of the state’s leadership in November 2016, budgeted N153.1 billion for the 2017 fiscal year. In the budget which is tagged “Budget of Consolation”, Edo State government projected total revenue of N142.6 billion of which N25 billion would be borrowed. And data obtained from Budgit, a social enterprise that scrutinizes public finance, showed that the state plans to spend N15.8 billion for debt servicing.

“Under Governor Adams Oshiomhole, Edo State invested heavily on infrastructure. The financial requirement was way beyond the income of the government, hence, the resort to local and foreign borrowing,” Mr David Adonri, Managing Director, Highcap Securities Limited, who hails from Edo State explained to BusinessHallmark in a text message.

READ  War has been provoked between Yoruba and Fulani- OODUA Redemption Alliance declares

“If the new borrowing is channel to economic activities, there will be justification since capacity to repay will be enhanced.”

The state governor will only justify its rising debt profile if it is able to put it to the right use by investing it in infrastructure, education, health, security and support for industry, said Mr. Kayode Omoregie, Faculty member, Lagos Business School, who is also an indigene of Edo State.

“The goal is to increase the income generating capacity of the state and increase the tax base and IGR capacity and efficiency in tax collection and utilization. It is also aiming at reducing government leakages, corruption and misappropriations,” the Finance expert further asserted.

Mr Crusoe Osagie, Special Assistant to Edo State Governor on Media told Business Hallmark through the phone that he had no knowledge of the state’s plan to borrow N25 billion to fund the 2017 budget. He, however, promised to clarify from the appropriate quarters. But he did respond to the three calls and a text message put across to him afterwards.

The state raked in N23.041 billion as internally generated revenue (IGR) in 2016 and plans to ramp it up to N33.8 billion in this financial year. It has gotten N13.42 billion as allocation from the Federation Account as at June 2017; it targets N47.8 billion for the year.

READ  Nigeria is on auto drive, PDP replies Lai Mohammed

Dr Adi Bongo, an Economic and a faculty member of Lagos Business School noted the Governor Obaseki-led administration has followed the path of its predecessor in terms of infrastructural development in the state. He however, expressed worry about the extent to which borrowed funds would be judiciously deployed. “My concern is that research has shown that only half of borrowed fund is used for infrastructural development,” he stressed.

Mr Augustine Aghedo who works in one of the financial institutions in Benin City, Edo State capital asserted that the current administration has been working assiduously on road construction and traffic management, especially at city centres.

But the state is currently struggling with rising crime rate, especially kidnapping.  Forthnight, Mr Osayomore Joseph, a notable muscian in Benin City was kidnapped.  This happened just a week after the proprietor of Ogba Zoological Gardens, Mr Ehanire was kidnapped and three his police orderlies were killed.

Nigeria’s debt profile has risen over 20 per cent in the last year one, raising concern that the country may be heading towards another debt overhang after Paris Club $18 billion debt relief in 2005.

The International Monetary Fund (IMF) last week warned emerging economies over their spiking debt profile, saying it poses grave danger to their economic growth.

 

 

 

 

Leave a comment

XHTML: You can use these html tags: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>

Most Shared

Recent posts

  • Stop paying dividends, CBN orders banks with huge bad loans

    Banks and discount houses with non-performing loans above 10 per cent will no longer be allowed to pay dividends to their shareholders. The Central Bank of Nigeria gave the directive as part of measures to curb the increase in non-performing loans and to stop further erosion of the capital base of the banks. The directive […]

  • All recovered assets will be sold, says Buhari

    President Muhammadu Buhari has assured Nigerians that all mismanaged and misappropriated national assets recovered will be sold off. In a statement issued on Monday by his Senior Special Assistant on Media and Publicity Mr Garba Shehu, he also vowed to ensure that the proceeds of the sales are paid to the treasury for the benefit […]

  • Ortom explodes! Says attacks by herdsmen, a continuation of Uthman Danfodio’s 1804 jihad

    Governor Samuel Ortom of Benue State has described the ongoing killings by Fulani herdsmen in the state as a continuation of 1804 jihad by Uthman Danfodio, alleging that the Fulani are angry because the initial jihad led by Danfodio was halted in Benue and prevented from proceeding to the sea. The governor who bared his […]

  • Drug abuse is on increase among youths

     Frustrated and humbled by increasing difficult economic conditions, pervasive social anomie, breakdown of age-old value system and discipline, most youths now find solace in drug abuse, writes Adebayo Obajemu  Fadairo [not real name] is 24, at that age, his physical appearance is that of a man in his thirties, slurred and incoherent speech, hanging jaw, […]

  • 2019: Can the Jagaban save Buhari?

    Challenges for Tinubu over the re-election bid By Obinna Ezugwu On Tuesday last week, pictures of President Muhammadu Buhari posing with Asiwaju Bola Ahmed Tinubu, National leader of the All Progressives Congress (APC) and Chief Bisi Akande, interim national chairman of the party filled the country’s media space. Both Tinubu and Akande had gone to […]

  • Kings of Broad Street: GT, ZENITH, UBA, ACCESS

    BY OKEY ONYENWEAKU As the banking industry gets tighter with narrowing operating margins and tougher competition for retail customers, the big four financial institutions are revising their strategies and setting up camp to fight an unconventional warfare. The new terms of engagement are moving from terrestrial combat to digital battlegrounds. ‘Banks will increasingly need to […]

  • Massive sell-off hits insurance sector

        FELIX OLOYEDE As the Nigerian Stock Exchange (NSE) changes its rules about the maximum price that stocks could dip below their nominal book values of 50 kobo per share, Insurance sector stocks since last week have taken a free fall. David Adonrin, managing director, Highcap Securities Ltd has been holding Royal Exchange Insurance […]

  • War has been provoked between Yoruba and Fulani- OODUA Redemption Alliance declares

    War has been provoked between Yoruba and Fulani- OODUA Redemption Alliance declares OBINNA EZUGWU At the end of its security summit held in Ibadan on Thursday, the OODUA Redemption Alliance resolved to end what it called gradual incursion into Yoruba land by herdsmen who they accused of continuing the Jihad of Usman Danfodio. The group […]

  • It would be utterly irrational for Nigerians to vote for Buhari again- Junaid Mohammed

    Second Republic lawmaker, Dr Junaid Mohammed has noted that President Muhammadu Buhari has performed poorly in office and it would be irrational for Nigerians to vote for him in 2019. Dr Mohammed who made the assertion in an interview with Vanguard on Saturday, also criticized Buhari for being a poor reader who according to him, […]

  • Bayelsa tour: Obasanjo lays foundation for refinery

    Former President Olusegun Obasanjo continued his visit to Bayelsa State after inaugurating some projects of the state government on Friday. The former president continued his tour of the state on Saturday with the laying of the foundation for the establishment of Azikel Refinery. The refinery is owned by Dr Eruani Godbless, a prominent businessman and […]

  • Quite notice, hate speeches and President Buhari’s Northenisation/Islamisation agenda by Professor Ben Nwabueze

    Quite notice, hate speeches and President Buhari’s Northenisation/Islamisation agenda by Professor Ben Nwabueze NATURE OF HATE SPEECHES In the aftermath of the divisions in the country caused by President Buhari’s Northernisation/Islamisation Agenda, as manifested in his lopsided strategic appointments that unfairly favour the North as against the South, and the complete exclusion of the South-East […]

  • Chief Adeniyi to Tinubu: Withdraw your support for Buhari or risk losing influence in Yoruba land

    OBINNA EZUGWU Veteran columnist and elder statesman, Chief Adetola Adeniyi has warned former Lagos governor, Senator Bola Ahmed Tinubu against supporting President Muhammadu Buhari’s second term bid, as according to him, such could mark the beginning of the end of his influence in Yoruba land. Chief Adeniyi who led the Global Intelligentsia for Buhari, a […]

  • Killings: Buhari condemns action, sends Defence Minister to Zamfara

    President Muhammadu Buhari has strongly condemned Thursday’s massacre of innocent persons in Birane village, Zurmi Local Government Area of Zamfara State. The President stated this in a statement issued on Friday by his Senior Special Assistant on Media and Publicity, Mr Garba Shehu, following the death of at least 18 persons as a result of […]

  • Obasanjo visits Jonathan at Bayelsa residence

    Former President Olusegun Obasanjo on Friday visited former President Goodluck Jonathan at his home in Bayelsa State. Dr Jonathan welcomed the elder statesman who was in his home for a private dinner, in company with his wife, Patience. Earlier before the visit, former President Obasanjo inaugurated a government specialist hospital in the state and unveiled […]

  • NNPC dispatches 29.058m litres of PMS to 13 states

    The Nigerian National Petroleum Corporation (NNPC) said it supplied a total of 29.058 million litres of Premium Motor Spirit (PMS) popularly known as petrol to thirteen Northern states in three days. In its report on daily dispatch to filling stations made available to the News Agency of Nigeria (NAN) in Abuja on Friday, it named […]

  • Lagos will bring about world class childhood disability intervention-Joyce Onofowokan

    An area in which different levels of governments in Nigeria have remained loudly silent and painfully indifferent is childhood disability. Children with disabilities and their parents have over the years ridden on waves of disillusion, despair, and decay. They constitute a tribe of the silent minority that the society has conveniently allowed to disappear into […]