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Nairaland Forum / Nairaland / General / Politics / Insolvency, Spends 91% Of FAAC Servicing Debt In Q1 (1190 Views)
Servicing Debt With 90% Revenue Path To Destruction — Tinubu / Tinubu: I Won’t Sustain Failed Theory Of Servicing Debt With Scarce Revenue / Osun State Flirts With Insolvency, Spends 91% Of FAAC Servicing Debt In Q1(pics) (2) (3) (4)
Insolvency, Spends 91% Of FAAC Servicing Debt In Q1 by Anambra1stS0n: 9:56am On Aug 09, 2020 |
For every N100 shared to the Osun State government as revenue allocation from the federation account (FAAC), N91 has deducted to service its debt, a pointer to how the state’s fiscal crisis has moved from bad to worse. The southwestern state has been grappling with years of backlogs of unpaid salaries owing to what analysts described as failure of the government to judiciously harness the revenue potentials of huge human and capital resources, and fresh data emanating have painted a clearer picture of how worse its financial position has got. The state may even be on the brink of seeking life support. Of the N6.44 billion obtained as revenue from FAAC in the month of January through March, Osun State spent a whopping 91 percent or N5.87 billion of the amount servicing its debt, according to data compiled by BudgIT, a non-governmental organisation that tracks fiscal expenditure of the government. That’s seven times more than the amount Yobe, a state with a similar size to Osun, spent as a deduction for debt in the period. It is also the highest deduction done ever on any of the 36 states as a percentage of FAAC, showing how terrible the fiscal situation of the state is at present. “It simply means that the state is insolvent,” said Cheta Nwanze, lead partner at Lagos-based risk consultancy SBM Intelligence “Either now or soon enough, the state government will no longer be able to meet its obligations to the people. And one of the things that may arise from that is either social unrest or more people leaving the state,” A 91 percent federal allocation deducted in servicing the states debt profile would leave the state with only about 9 percent of the revenue to be used as expenditure on health, education as well as other financial obligations for its over 4.6 million people, according to BusinessDay estimate. This burden on the state could have been a bit lighter but for the government’s inability to look inward and grow its stream of internally generated revenues. In terms of IGR, the state like many others is also not faring any better either. Data from the National Bureau of Statistics show that in the whole of 2019, Osun raked in N17.92 billion as revenues generated internally. This figure represents about 42.5 percent of the total N42.14 billion (FAAC+IGR) the state printed as revenue for the period. Like others, it could be deduced from the data that revenue gotten from FAAC accounts forms the larger chunk of its total revenue, accounting for close to 58 percent of revenues generated within the period. With the heavy deduction from the state’s allocation in the first half of the year, analysts believe the state may be in for a tougher time than what was seen before. For the analysts, they expect a fall in government expenditure, an additional pile-up of salary backlogs, increasing poverty levels in the state, widening inequality, a threat to livelihoods of Osun populace and a further fall in the standard of living to be worsened by the government inability to raise more debt due to a lack of financial viability as well as the coronavirus pandemic which has taken a toll on both federal and states revenue streams. With a total debt profile of over N170 billion already, Osun state ranks as the sixth most indebted state in Nigeria and is too insolvent to borrow more because of its lack of economic viability to repay. A $20 million World Bank grant obtained in early 2019 to revamp its health sector has also raised serious controversy by members of the states National Assembly, claiming the money has not been judiciously utilised by the government as many hospitals in the state are still without drugs, appropriate working facilities and understaffed. The state has slashed its 2020 budget to N82 billion from an earlier planned amount of N119 billion due to the fiscal challenges occasioned by the pandemic, and even at that amount, analysts doubt the state’s capacity to effectively fund the budget. With a total of 605 confirmed coronavirus cases of the virus out of which 329 have been discharged while 13 died of the virus as of 8th August, according to NDDC data, the state is battling to contain its increasing infection rate so as not to overwhelm its frail health sector. Osun state might be one of the several cases of states whose finances are on the brinks of insolvency due to a high debt burden compared to revenue, but it is certainly not the only state sailing on that boat. Due to the inability to generate revenues, many Nigerian states are highly indebted and this singular act has pushed the country’s debt at a record high of N28.6 trillion as at end June, according to data from the Debt Management Office (DMO), of which Further analysis of the data put forth by BudgIT shows that Lagos, Osun, Plateau, Cross River Ondo, and Bayelsa have the highest FAAC deduction within the period. The aforementioned states with net FAAC allocations of N25.23 billion, N6.44 billion, N8.53 billion, N8.02 billion, and N35.14 billion, had N15.92, N5.87, N5.18, N5.06, N4.59 and N4.55 billion deducted respectively. On the other hand, states of Yobe, Jigawa, Anambra, Enugu, with net FAAC allocations of N12 billion, N13.74, N12.34 billion, and N12.09 billion, had the least deduction of N820 million, N1.04 billion, N1.1 billion, and N1.31 billion respectively. https://businessday.ng/business-economy/article/osun-flirts-with-insolvency-spends-91-of-faac-servicing-debt-in-q1/ Lalasticlala 1 Like 1 Share
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Re: Insolvency, Spends 91% Of FAAC Servicing Debt In Q1 by omowolewa: 9:57am On Aug 09, 2020 |
I hope the laws would guide our appetite for loans in future. It's unacceptable for governments to pass burden of loans to their successors. Anifowose ni Oyetola na. Only Osogbo enjoyed the loan (more than two-third of the state'sincome) but the whole of Osun State must pay for it. |
Re: Insolvency, Spends 91% Of FAAC Servicing Debt In Q1 by iokpebholo: 10:01am On Aug 09, 2020 |
And some clowns will still tell u that aregbesola is d best thing to happen to that state 4 Likes |
Re: Insolvency, Spends 91% Of FAAC Servicing Debt In Q1 by Anambra1stS0n: 10:05am On Aug 09, 2020 |
And some guys from that side careless what's happening in their region, they are more concerned about Southeast Cc NGpatriot LegendHero BabaRamota1980 MetaPhysical 4 Likes |
Re: Insolvency, Spends 91% Of FAAC Servicing Debt In Q1 by Anambra1stS0n: 10:19am On Aug 09, 2020 |
post=92620170: How far with those in Osun calling opposition members IPOB during last governorship election in Osun , I guess IPOB are the ones that milked Osun dry, same squared has moved to Edo, when the gbese start them go disappear. NgeneUkwenu 4 Likes |
Re: Insolvency, Spends 91% Of FAAC Servicing Debt In Q1 by ERockson: 10:22am On Aug 09, 2020 |
Like Aregbe like Buhari, Osun state is highly insolvent and bankrupted courtesy of Aregbe. This is the level Buhari is taking Nigeria to even deeper and messer. 6 Likes 1 Share |
Re: Insolvency, Spends 91% Of FAAC Servicing Debt In Q1 by Nobody: 10:24am On Aug 09, 2020 |
Yet they clamoured for Aregbesola to become Minister... What else is Stockholm syndrome if not this... 6 Likes |
Re: Insolvency, Spends 91% Of FAAC Servicing Debt In Q1 by Anambra1stS0n: 10:36am On Aug 09, 2020 |
You can't see them comment here, rather they will be viewing as guest ![]() ![]() 3 Likes |
Re: Insolvency, Spends 91% Of FAAC Servicing Debt In Q1 by Anambra1stS0n: 10:45am On Aug 09, 2020 |
the state government will no longer be able to meet its obligations to the people. And one of the things that may arise from that is either social unrest or more people leaving the state,” A 91 percent federal allocation deducted in servicing the states debt profile would leave the state with only about 9 percent of the revenue to be used as expenditure on health, education as well as other financial obligations for its over 4.6 million people, according to BusinessDay estimate. For the analysts, they expect a fall in government expenditure, an additional pile-up of salary backlogs, increasing poverty levels in the state, widening inequality, a threat to livelihoods of Osun populace and a further fall in the standard of living to be worsened by the government inability to raise more debt due to a lack of financial viability as well as the coronavirus pandemic which has taken a toll on both federal and states revenue streams. No wonder there are high rate of westerners invading Southeast this days 3 Likes
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Re: Insolvency, Spends 91% Of FAAC Servicing Debt In Q1 by ThatFairGuy: 10:46am On Aug 09, 2020 |
In all odds, we all see what Ogbeni Abdu-r-rauf Adesoji Aregbesola used the money for. Besides, it wasn't like that until second quarter of 2014 when oil revenue dwindled. Before this time, Osun's IGR has been raised from 300m monthly to over 2b monthly, where Ogbeni keeps 5b monthly as Osun reserves. These savings was what he used to service Osun till early 2015. He has already initiated all the projects, what else is he advised to do? He had to even abandone the ones that have not been given out for execution due to the shortfall. So before anyone will castigate him IGNORANORANTLY, know the exegesis first. 1 Like 1 Share |
Re: Insolvency, Spends 91% Of FAAC Servicing Debt In Q1 by ThatFairGuy: 10:48am On Aug 09, 2020 |
[s] post=92621391:[/s] Don't start your gibberish here please. Can Any governor in your region match Aregbesola if not what happened. NONSENSICAL Go to every villages in Southwest, your people's work is to harvest palm nuts and tap palm wine 3 Likes 1 Share |
Re: Insolvency, Spends 91% Of FAAC Servicing Debt In Q1 by Anambra1stS0n: 10:53am On Aug 09, 2020 |
ThatFairGuy:Continue fooling yourself, while Osun is sinking Cut your coat according to your cloth 5 Likes |
Re: Insolvency, Spends 91% Of FAAC Servicing Debt In Q1 by ThatFairGuy: 11:01am On Aug 09, 2020 |
post=92621639:Don't get that statement wrong please. There's Difference between human capital development and monthly Federal allocation. NO STATE IN THE EAST MATCH OSUN IN TERMS OF HUMAN CAPITAL. Meaning Osun poverty index is far much lower than any Eastern State. Thanks to Aregbesola and the incumbent for this. The index is there for everyone to see. 3 Likes 1 Share |
Re: Insolvency, Spends 91% Of FAAC Servicing Debt In Q1 by Anambra1stS0n: 11:19am On Aug 09, 2020 |
ThatFairGuy: ![]() ![]() ![]() Sorry for your guys 6 Likes |
Re: Insolvency, Spends 91% Of FAAC Servicing Debt In Q1 by Nobody: 12:21pm On Aug 09, 2020 |
...spending about 52% of total revenue on debt servicing is the new cool...according to supporters of aregbe...debt servicing, not debt repayment...50 shades of magomago 4 Likes |
Re: Insolvency, Spends 91% Of FAAC Servicing Debt In Q1 by Anambra1stS0n: 1:06pm On Aug 09, 2020 |
veeshock:91% not 52% 1 Like |
Re: Insolvency, Spends 91% Of FAAC Servicing Debt In Q1 by Nobody: 1:12pm On Aug 09, 2020 |
post=92626089:Lol...you already have say 10k and Im supposed to give you another 10k but took 9k to pay your debtors, how much are you left with? 91% of FAAC allocation, about 52% of total revenue...flushed into debt servicing. all hail aregebe. 3 Likes |
Re: Insolvency, Spends 91% Of FAAC Servicing Debt In Q1 by wickyyolo: 1:17pm On Aug 09, 2020 |
ThatFairGuy: Keep lying and deceive yourselves. Nigeria is a shit hole. 3 Likes |
Re: Insolvency, Spends 91% Of FAAC Servicing Debt In Q1 by LegendHero(m): 1:29pm On Aug 09, 2020 |
post=92621391: An Igbo saying high rate of SW’ners are invading the SE lol. Your brothers are all over the SW states living and breeding children here while many sell gala and fan yogo on the road side. They even arrested one not too long ago begging in Ekiti while lying she was blind. There are several of them domiciled here doing that rubbish. Wonders they say shall never end! 3 Likes 1 Share |
Re: Insolvency, Spends 91% Of FAAC Servicing Debt In Q1 by Nobody: 1:34pm On Aug 09, 2020 |
Osun state again the state along her indigenous citizens should be nuked down and used as grazing reserve.... after that the whole place should be used as farm settlement.. 1 Like |
Re: Insolvency, Spends 91% Of FAAC Servicing Debt In Q1 by LegendHero(m): 1:37pm On Aug 09, 2020 |
As per the thread, Aregbesola did a great mistake by borrowing too much without planning. I think the fall in crude oil price also added to his problems because he projected for much allocation from the FAAC but the fall in allocation which followed the crude oil price fall affected him a lot. However, he performed so well in area of infrastructures and governance to the extent that he is the best performing governor Osun state has ever produced. Most Governors in other state borrow money with nothing to show for it in their state but Aregbesola legacy in infrastructures and etc. is still evident in Osun today. Like they say challenges bring innovation, Oyetola and the people of Osun should not cry over spilled milk and they should all think and try to find a way to generate revenue within the state by attracting investors by making Osun policy favorable for them. Most of Osun cities has almost average 18-20hrs of electricity daily and there is presence of good roads in the environs. Government should start making use of this advantage to attract massive investment. This will be a lesson to other Governors to not go beyond their state limit coz projections some time fail and the people will be the one to bear the consequences. 2 Likes 1 Share |
Re: Insolvency, Spends 91% Of FAAC Servicing Debt In Q1 by Apawicked: 1:42pm On Aug 09, 2020 |
ThatFairGuy:The same Osun that its IGR is bigger than the whole SE IGR according to Aregbe can no longer sustain a bacward state like Osun. This is how propaganda rubbishes people that feed of it. 6 Likes |
Re: Insolvency, Spends 91% Of FAAC Servicing Debt In Q1 by ThatFairGuy: 2:01pm On Aug 09, 2020 |
wickyyolo:Don't digress please. 1 Like 1 Share |
Re: Insolvency, Spends 91% Of FAAC Servicing Debt In Q1 by ThatFairGuy: 2:04pm On Aug 09, 2020 |
Apawicked:When did he made such statement? Say anything you like, poverty rate in your region is higher than that of Osun 1 Like 1 Share |
Re: Insolvency, Spends 91% Of FAAC Servicing Debt In Q1 by ThatFairGuy: 2:08pm On Aug 09, 2020 |
[s] MelesZenawi:[/s] For the poverty ravaged South Easterners I guess. Remove the log in your eyes First. Tackle the unemployment rate in your poverty ravaged region 1 Like 1 Share |
Re: Insolvency, Spends 91% Of FAAC Servicing Debt In Q1 by Obalatule: 2:10pm On Aug 09, 2020 |
Osun state with the highest IGR GDP ITD TUK and IDP ![]() 2 Likes |
Re: Insolvency, Spends 91% Of FAAC Servicing Debt In Q1 by Obalatule: 2:11pm On Aug 09, 2020 |
ThatFairGuy:Have you been to osogbo niggs? Chai, lord eep them |
Re: Insolvency, Spends 91% Of FAAC Servicing Debt In Q1 by Gracchus: 2:17pm On Aug 09, 2020 |
post=92620170:Yea, see this old fool who cares about his own region but masturbates about Tinubu everyday of his miserable life. How much has Tinubu stolen from your state and region before? Why u dey get headache bloody fool. You can tell your vagabond brothers if they care about their region so much they can all move back, not as if they are even welcomed anyway. Motherfucvker!!? 3 Likes 1 Share
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Re: Insolvency, Spends 91% Of FAAC Servicing Debt In Q1 by Anambra1stS0n: 2:19pm On Aug 09, 2020 |
Gracchus: ![]() ![]() |
Re: Insolvency, Spends 91% Of FAAC Servicing Debt In Q1 by gwafaeziokwu: 2:20pm On Aug 09, 2020 |
![]() It's difficult to wake up a man who is pretending to be asleep. No wonder Buhari's government has been borrowing like no man’s business. The wealth squanderers all surround him. Owambe people, living for now. 2 Likes |
Re: Insolvency, Spends 91% Of FAAC Servicing Debt In Q1 by Gracchus: 2:20pm On Aug 09, 2020 |
post=92621391:Lmao. The whole westerners in your region aren't even up to 500k tops. But if e dey pain you we can all play a game of "Bleep of to your region" let your wandering brothers and prostitute sisters scattered over the SW and our people less than 500k will leave. Oh, lest I forget, have you vacated the north like they told you to do sometimes back, or y'll vagabonds are still thronging the place like refugees? |
Re: Insolvency, Spends 91% Of FAAC Servicing Debt In Q1 by Anambra1stS0n: 2:22pm On Aug 09, 2020 |
Gracchus:Please I'm not the one you're following on instagram. |
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