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21 state govts solicit N1.65tn loans to fund 2024 budgets – Report
21 state govts solicit N1.65tn loans to fund 2024 budgets – Report
Twenty one states of the federation are seeking loans amounting to N1.65 trillion to fund their 2024 budget deficits despite the increase in the allocations they have received from the Federation Account Allocation Committee (FAAC) in the last one year.
From June 2023 to June this year, all the 36 states and the 774 local governments received a total of N7.6 trillion from FAAC. This increase in revenue is largely due to the removal of petrol subsidy by the federal government on May 29, 2023.
Findings by Daily Trust show that the 36 states are projected to receive N5.54 trillion from FACC for this year as against the N3.3 trillion disbursed to them last year.
Under the current revenue-sharing formula, the federal government receives 52.68 percent; while states and local governments get 26.72 percent and 20.60 percent respectively. Such federation revenues, in addition to internally generated revenues of each tier, are expected to facilitate development across the three tiers of government, and also ensuring that the governments fulfill their financial obligations.
The FAAC allocations to local governments for June were paid directly to the state governments.
The Supreme Court had, on July 11, affirmed financial autonomy for the local governments. The apex court directed that the financial allocations meant for all the 774 local government areas in the country be paid to them directly. It said it is unconstitutional for state governments to keep and manage allocations on behalf of the local governments.
States’ borrowing patterns
Investigations by Daily Trust show that 21 states have expressed intentions to borrow a total sum of N1.650 trillion from both internal and external sources to fund their 2024 budget deficits.
Other states are yet to upload their borrowing plans.
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According to details of the borrowing plans made public, the Adamawa State Government is to borrow N68.46 billion; Anambra N245 billion; Bauchi, N59.08 billion; Bayelsa, N64 billion; Benue, N34.69 billion; Borno, N41.71 billion; Ebonyi, N20.5 billion; Edo, N42.71 billion and Ekiti State, N27.15 billion.
Others are Jigawa, N1.78 billion; Kaduna, N150.1 billion, Kebbi, N36.7 billion; Katsina, N163.87 billion; Kogi, N37.08 billion; Kwara, N30.76 billion; Osun, N12.36 billion; Oyo, N133.4 billion; Nasarawa, N32.93 billion; Gombe, N73.75 billion; Enugu, N103 billion and Imo, N271.34 billion.
Breakdown of states’, LGAs allocations in 1yr
The monthly FAAC allocations to the 36 states and the 774 local governments from June last year to June this year stood at N7.6 trillion. This represents an increase of over 40 per cent.
In June 2023, states got N299.92 billion; local government councils (LGCs), N221.79. July: states, N310.670 billion, LGCs, N229. 409 billion. August: states, N319.52 billion; LGCs, N236.23 billion. September: states, N361.19 billion; LGCs, N266.54 billion. October: states, N287.07 billion; LGCs, N210.90 billion. November: states, N379.41 billion; LGCs, N278.04 billion. December: states, N396.693 billion and LGCs, N288.928 billion.
In January this year, state governments got N379.407 billion; LGCs, N278.041 billion. February: states, N366.95 billion; LGCs, N267.15 billion. March: states, N398.689 billion; LGCs, N288.688 billion. April: states, N403 billion; LGCs, N293 billion. May: states, N388.419 billion; LGCs, N282.476 billion. June: states, N461.979; LGCs, N337.019 billion.
Allocations from Value Added Tax also rose year-on-year by 228.8 percent to N2.42 trillion in the first five months of 2024, up from N736.06 billion in the first five months of 2023.
The 13 percent derivation fund received by oil producing states also rose by 234 percent to N519.83 billion in the first five months of 2024, up from N155.5 billion in the first five months of 2023.
20% of June allocation enough to build 320 PHCs
In June this year alone, the FAAC allocations to both states and local governments crossed the N1 trillion mark with N1.3 trillion.
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If the standard of N500 million outlined by the World Health Oganisation (WHO) for establishment of an averagely equipped primary healthcare centre facility is anything to go by, 20 percent (N160 billion) of the June allocation is enough to put in place 320 of such health facilities nationwide.
There’s need for accountability – Experts
The Executive Director of the Centre for Fiscal Transparency and Public Integrity, Umar Yakubu, said there is a need for accountability regarding how the allocations to the states are being spent. In an interview with Daily Trust, Yakubu noted that the removal of the petrol subsidy has led to a significant increase in revenues, especially at the states and local governments.
He said: “The major issues is that governments think the more they make revenue, the more they solve problems because the accountability mechanism is so weak and the audit processes are not good enough to check excesses.
“So, what you have is more Naira into the system and the few who have access to them will convert them to dollars, which is the major reason our foreign exchange market has not stabilised because of too much Naira chasing few dollars.
“Therefore, we call for accountability which has to be in place to check corruption because as you can see, more money has come, but no state is recruiting, no state is increasing pensions or allowances of workers or event increasing capital expenditures because they are just siphoning money without accountability”, he said.
Also speaking to Daily Trust, a development expert, Victor Agi, said if the issue of accountability at the sub-national level is not tackled head-on, the challenges at the grassroots would continue.
Agi said state governments must be accountable with the increased revenues to drive growth at the grassroots.
“One of the issues is that people always blame bad governance on the federal government, forgetting that governors also get huge allocations to develop their various states.
“In the last one year, revenues have grown by almost 50 per cent, yet the governors can’t improve welfare of their workers and the people in general. For instance, the president signed the national minimum wage of N70,000 and some of the governors are kicking that they can’t pay despite increase in revenues. This indicates that something is wrong.
“What is more disturbing is that the same issue will now be encountered in the local governments now that their allocations will be paid directly. There is need for more awareness from civil society to ensure that development at the grassroots is implemented now that revenues have increased,” he said.
21 state govts solicit N1.65tn loans to fund 2024 budgets – Report
DAILY TRUST
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School teachers begin indefinite strike in Abuja
School teachers begin indefinite strike in Abuja
Teachers in government-owned schools across the Federal Capital Territory (FCT) have started an indefinite strike. This action follows the expiration of a 14-day ultimatum issued by the Nigeria Union of Teachers (NUT), FCT Chapter, to the six area councils in the territory.
On Wednesday, pupils who arrived at school were sent home by their teachers upon reaching the school gates, leaving them disappointed.
Comrade Ameh Baba, the NUT Chairman in Kubwa, confirmed the strike, explaining that it was initiated to push for the payment of 60 percent of the minimum wage arrears owed by the area councils.
He also criticized the councils for failing to implement the payment of 40 percent peculiar allowances and the 25 percent and 35 percent salary increments for teachers.
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Comrade Ameh stressed the importance of primary education as the foundation of human development and urged the government to treat the matter seriously.
The union warned that if the government does not respond within seven days, they will escalate the strike by picketing the area council secretariats and organizing protests, with secondary school teachers joining in solidarity. He also noted that the strike would impact Junior Secondary School 1 students, as their results are due for release.
School teachers begin indefinite strike in Abuja
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Students can reapply for loans, we’ve resolved BVN verification glitch – NELFUND
Students can reapply for loans, we’ve resolved BVN verification glitch – NELFUND
The Nigerian Education Loan Fund (NELFUND) has announced the resolution of a technical issue that disrupted the BVN (Bank Verification Number) verification process for students applying for loans.
The issue, which began over the weekend and persisted through the public holiday, caused delays for many applicants.
In a statement posted on NELFUND’s official X (formerly Twitter) account on Wednesday, the organization confirmed that the issue had been fully resolved by Tuesday morning. NELFUND advised all affected students to log back into the portal, complete their BVN verification, and proceed with their loan applications.
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“Dear Students,
“We have observed that many of you experienced issues with BVN verification while applying for the student loan over the last weekend, including the public holiday.
“We are pleased to inform you that the issue has been addressed and fully resolved as of yesterday morning.
“We kindly advise all affected students to log back into the portal, complete the BVN verification process, and proceed with your loan application,” the statement read in part.
NELFUND also expressed gratitude to students for their patience during the disruption and reassured them that the application process can now continue smoothly without further issues.
Students can reapply for loans, we’ve resolved BVN verification glitch – NELFUND
News
Obasanjo reveals how Abdulsalami almost awarded $280m telecom deal for $3m to friends
Obasanjo reveals how Abdulsalami almost awarded $280m telecom deal for $3m to friends
Former President, Olusegun Obasanjo, has recounted how the former military Head of State, Gen. Abdulsalami Abubakar (retd), almost shortchanged Nigeria in a lucrative telecommunications deal.
Obasanjo revealed that Abdulsalami almost robbed Nigeria of a $280 million deal during nation’s transition to mobile telecommunications.
Obasanjo said when Nigeria was about to make the switch from landline telephones to mobile phones, some major telecommunication companies approached the country and promised to provide mobile lines for the citizenry, but Abubakar wanted to award the deal to his friends for $3 million.
The former President, however, said he suggested that the contract be made public for investors to bid and the highest bidder was awarded the contract, leading to the $280 million sale.
He made the revelation at the launch of a book titled ‘The Catalyst: Nigerian ICT Evolution through a Journalist’s lens,’ authored by an immediate past Editor of The PUNCH Newspapers, Mr Dayo Oketola, in Lagos.
He also disclosed that he was able to get Etisalat to pay $450 million to get the licence to operate in Nigeria.
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Speaking at the event, Obasanjo said: “The story of telecommunications, particularly mobile telecommunication, is a very interesting one. Before mobile telecommunication, we had spent a lot of money, we had all sorts of companies invited from America, France and even from Britain, but we did not get more than 500,000 lines. People had to queue at the telephone kiosk to call their loved ones abroad. And then, of course, the mobile telephone age came in.
“When it came in, my predecessor in office was trying to give it away, I think, to their friend for $3 million. Then we said, what we would do was to auction it. The three that came in first, I think, paid $280 million for the line. $280 million for something about to be given away for $3 million. That was the first thing we did. Not only that, we achieved competition.
“The three of them were competing. And, of course, the one that had the upper hand in terms of spread, I think, was MTN, followed by Glo. And then, there was Econet. They are now Airtel. And then, of course, later on, we had the fourth one, Etisalat. When Etisalat came, I told them the last one we did was $280 million. We told Etisalat to pay $450 million. They did.
“When they paid $450 million, the ball went in the post and then we were playing. That was how we got money to do what we did at the time we did it. That opportunity can still be made available. The money to develop Nigeria is out there, but that money will not come in unless we create a conducive atmosphere for that money to come in.
“What we did or what Nigeria has done in the good days when things were going well, are still there and can still be done today only if we put ourselves and we are honest to ourselves. We have to show character and attitude.”
Obasanjo reveals how Abdulsalami almost awarded $280m telecom deal for $3m to friends
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