- How 31 State Governments Borrowed N457.17bn To Pay Salaries Under Salary Bailout Facility
Imo, Kogi, Kano, Oyo, Osun, Edo are some of the states that topped the lists of states that borrowed money from the Central Bank of Nigeria (CBN) to pay salaries, a report by Nairametrics has shown.
According to the report, not less than 31 state governments in Nigeria borrowed N457.17 billion to pay salaries to their respective civil servants as facilitated through the Salary Bailout Facility (SBF), an intervention by the apex bank.
Despite the substantial disbursement, the principal repayments made so far is a total of N117.21 billion, with interest repayments still at N45.21 billion.
Consequently, a considerable sum of N339.97 billion remains outstanding, which is about 74% of the total amount disbursed. There is also an overdue amount of N1.31 billion as of September 2023.
Here are the top 10 states that benefitted most from the loan:
10. Abia State
Abia State secured the tenth position with an amount of N14.27 billion disbursed for salary payments. Known for its commercial hub in Aba, which is famous for crafts and footwear, the state has had to navigate economic challenges, likely leading to this borrowing.
9. Kaduna State
Kaduna State follows with N14.47 billion. As a key industrial center in Northern Nigeria, Kaduna’s borrowing underscores the economic pressures faced by this state, which is also struggling with cases of insecurity.
8. Ondo State
Ondo State, renowned for its cocoa production and rich cultural heritage, borrowed N14.86 billion. The state’s reliance on federal allocations and this borrowing indicates a need to diversify its revenue base.
7. Benue State
Known as the “Food Basket of the Nation,” Benue State required N15.7 billion. Despite its agricultural prowess, the state’s need to borrow points to fiscal strains in managing its administrative responsibilities.
6. Edo State
With a disbursement of N15.76 billion, Edo State is sixth on the list. The state, famous for its rich history and as a cultural nerve-center of the old Benin Empire, has sought financial intervention to meet its governmental obligations.
5. Osun State
Osun State, with a loan amount of N15.93 billion, holds the fifth spot. Known for its tourist attractions like the Osun-Osogbo Sacred Grove, the state’s economic activities are diverse, yet salary payment requires central borrowing.
4. Oyo State
In fourth place, we have Oyo State which obtained N16.81 billion. As one of the larger states by population and economy, particularly with Ibadan being a major urban center, the state still had to turn to the CBN for fiscal support.
3. Kano State
Kano State, a major commercial and agricultural hub in Northern Nigeria, borrowed N20.21 billion. This substantial amount reflects its large civil service and the state’s efforts to maintain stability in its government services.
2. Kogi State
Just a notch below the top borrower is Kogi State, with a loan of N20.26 billion. The state has a strategic location with several natural mineral resources but still faces economic challenges leading to the need for borrowing to pay salaries. The state is also the most expensive state to live in Nigeria.
1. Imo State
At the top of the list is Imo State, which borrowed the highest amount at N20.46 billion. Imo’s economy is heavily reliant on oil and agriculture, but the size of its public sector workforce and the huge burden of salary arrears has likely necessitated significant borrowing to manage salary payments.
