In Nigeria’s bent federalism, the executive arm at the federal and state levels ensures that it gets what it wants by controlling the lawmakers.
So rather than checking the excesses of the executive, the legislative arm at every level of government has mostly been a willing tool for the executive. This makes nonsense of the checks and balances deliberately inserted into the constitution to ensure transparency and accountability.
So, when bills for loans are sent to the state and federal parliaments, there are hardly robust debates about them before passage. Special sessions are convened to approve the loans without proper scrutiny.
This is dangerous. The main task of a parliament is to watch over the people’s money.
States have more money from the Federal Account Allocation Committee following the withdrawal of petrol subsidies in May 2023.
FAAC shared N905.53 billion and N736.78 billion among the three tiers of government in September and October 2022. The disbursements in September and October 2023 were N1.48 trillion and N1.59 trillion respectively. FAAC distributed N1.29 trillion and N1.41 trillion respectively in September and October.
While most Nigerians are fixated on the federal debt portfolio of Nigeria’s N136 trillion total, the states have been steadily amassing debts. At the last count, the total debt of the states has hit N11.47 trillion.
This is according to an analysis of data from the public debt reports released by the Debt Management Office as of June 30.
The figure for the second quarter of 2024 represents a 14.57 per cent increase from the N10.01 trillion recorded in December 2023.
External debt for the states and the Federal Capital Territory climbed from $4.61 billion to $4.89 billion, reflecting a 6.14 per cent increase.
However, in naira terms, this figure surged by a staggering 73.46 per cent, from N4.15 trillion to N7.2 trillion, following the devaluation of the naira from N899.39/$1 in December 2023 to N1,470.19/$1 by June 2.
In the comity of the debtor states are those with the highest internally generated revenue. Some have extremely low IGRs and depend mostly on FAAC handouts to pay their bills.
Many state governors borrow to build airports that are not viable and may not bring revenue or investments to the states for decades. So, rather than spending money on health, education, and agriculture, they build white elephants with borrowed funds.
Some build overhead bridges to nowhere even when there are so many unmotorable roads to be reconstructed. Many states are grappling with inadequate funding for education and healthcare. Nigeria has 18.3 million out-of-school children, the second highest globally per UNICEF.
In some instances, loans are taken to fund recurring expenditures and some governors enter into agreements with foreign companies without due diligence. This often results in litigation as happened recently when Chinese companies seized public assets in European capitals.
To check the governors, the assemblies need to be the eyes and ears of their constituencies by scrutinising every loan bill before approval. This will ensure that states are not pushed into the debt trap.
Civil society organisations should pressure the governors to stop borrowings that could compound states’ finances.
Citizens should utilise the constitution to complain about perceived maladministration in their states. They should take that route if they think their governors have made bad financial decisions.
Indeed, some former governors have left behind huge debts for their predecessors to pay. Governor Alex Otti of Abia State said recently that his administration had, in 15 months, paid N90 billion out of the N191.2 billion debt inherited from the previous administrations, without taking fresh loans.
Former governors who have plunged their states into huge debts through questionable borrowings should account for their tenure.
