BudgIT ranks Bayelsa State lowest in its 2021 fiscal performance index

Authoritative research organization, BudgIT, has ranked oil producing Bayelsa State 36th in its 2021 fiscal performance table, with the 3rd highest operating expense and one of the lowest Internal Generated Revenue, IGR in Nigeria.

In a statement released this morning, Wednesday October 12, on its twitter handle, BudgIT, noted that Bayelsa’s operating expenses and loan repayments of N146.72bn gulped 78% of its total revenue in 2020.

The statement obtained by Fresh Angle International, explained: “This leaves a meagre 22% of its total revenue for investment in capital infrastructure and its citizens.

“As a result, Bayelsa was one of five states in the country that gave the least priority to investment in capital expenditure.

“Bayelsa’s operating expenses, which stood at N131.38bn, was 3.4 times its capital infrastructure spending of N38.10bn. 

“The state needs to prune its operating expenses or grow its IGR fast enough to finance critical infrastructure spending adequately.

“With a total debt burden of N168.06bn as of December 2020, Bayelsa state was the 11th most indebted state in the country. 

“It also had a very high total debt per capita of N65,695 which was more than twice the average total debt per capita of N27,316 for all 36 states.

“Its total debt is also more than 50% of its 2020 total revenue, which could have reduced its chances of raising funding from the capital market in 2021. Section 223 (1b) of the Investments and Securities Act (ISA), 2007 restricts further borrowing from the capital market......once this threshold is breached to reduce risk of default by any state.

“Despite being blessed with enormous potential for economic prosperity from which it can potentially generate additional revenue, the state still had one of the smallest IGRs in Nigeria in 2020.

“The state was also one of 18 states unable to withstand the shocks from the COVID-19 pandemic to their Internally Generated Revenues, as it experienced a 12.44% decline in its IGR from N13.85bn in 2019 to N12.18bn in 2020.

“This meagre IGR makes the state highly dependent on federally distributed revenue, which accounted for 90% of the state’s recurrent revenue in 2020.

“The first fiscal option we recommended for Bayelsa was for the state to trim its high N131.38bn operating expenses by introducing institutional fiscal reforms to block leakages that might be causing bloated costs.

“Likewise, state will also need to boost citizens’ capacity to pay income taxes (PAYE) through fiscal interventions for economic prosperity that stimulate the private sector to create job opportunities for Bayelsa, among other reforms.

“We will talk more about Bayelsa’s progress, and performance between 2020 and 2021 at our 2022 #StateofStates report launch and presentation”.

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