Kaduna State's debt profile has taken a significant leap. In just six months, the state borrowed N36 billion, surpassing the combined total of N29.6 billion borrowed in 2022 and 2023.
Kaduna State Government has reneged on promises to avoid debt, with the state accumulating substantial debt, reveals a SaharaReporters review of the second-quarter budget performance document.
Kaduna State's debt profile has taken a significant leap. In just six months, the state borrowed N36 billion, surpassing the combined total of N29.6 billion borrowed in 2022 and 2023.
Breaking it down, the state borrowed N3 billion in 2022 and N26.6 billion in 2023. What's more alarming is that the state's debt servicing already stands at N28 billion for the first half of 2024.
This rapid debt accumulation raises concerns, especially considering Fitch Ratings' assessment that Kaduna's debt has increased sharply since 2019, primarily due to multilateral lending and loans from local banks.
The rating agency expects Kaduna's net adjusted debt to reach NGN1.5 trillion by 2028, driven by the state's ambitious NGN1 trillion capital expenditure plan for infrastructure development.
Kaduna's financial situation is precarious, with a 'Vulnerable' risk profile and 'bb' debt sustainability rating. The state's revenue growth is hindered by its weak socioeconomic profile and reliance on federal government transfers.
Earlier this year, while speaking against the loans obtained by his predecessor, Nasir El-Rufai, the incumbent governor of Kaduna state, Uba Sani, noted that he was committed to developing the state using its “lean resources”.
He said this in apparent reference to the harm done by the loans obtained by El-Rufai and how his administration will ensure that the state is not enmeshed in debts.
There have been concerns over loans obtained by states in Nigeria with commentators noting that this usually has a huge impact on developmental strides.
Experts have also asked for more prudence in revenue management and accountability to help states manage their scarce resources.