Beginning from late last year when he indicated his interest to run for the governorship election, Kaduna state governor-elect, Malam Nasir El-Rufa’i, has consistently harped on what he describes as the level of indebtedness of the state government, to various financial institutions, from even across the shores of Nigeria. El-Rufa’i has often said that the development would likely constitute a problem for the next governor.
In fact, in the course of his governorship campaigns, El-Rufa’i said in an interview in December 2014 that, “from our estimates, every child born in Kaduna state has a debt of N15,000. If you have a child going to be born tomorrow, that child already has a debt burden of N15,000 and there are about eight million people in Kaduna state. So, you do the calculation.”
But having emerged the governor-elect and with his slogan, “Time to make Kaduna great again,” El-Rufa’i, has since pledged to reverse the “several years of mismanagement of the state’s resources by successive administrations.” Receiving his certificate of return at the INEC headquarters in Kaduna on April 16, El-Rufa’i also raised the debt issue, lamenting that there may be constraints for his administration.
He bared his mind this way: “our state is heavily indebted at a time when oil prices are low. Our state has not seen significant development in the last eight years. We must work twice as hard with half the resources of the last eight years just to catch up with our neighbors. The state government collected and spent N600 billion in seven years, yet there is little evidence of all that going by the poor infrastructure base of the state, whether roads or water supply, or in human capital development, jobs and social welfare indices.
Kaduna state has the highest debt level per capita in Nigeria; yet it is also rated by the World Bank as the worst place to do business in northern Nigeria. Even our capital city, Kaduna, from where the huge landmass and people of northern Nigeria were administered for decades, is almost stagnant, appearing dazed by the sheer incompetence it is enduring.”
Although El-Rufa’i has never given any specific figures to show the level of indebtedness of the Kaduna state government, outgoing Governor Mukhtar Ramalan Yero estimates the debt profile to be about N37.5 billion. In fact, Yero may have earned a reputation of sort for himself as the first leader to pay debts incurred before he was born. According to Yero, his administration inherited a “huge” debt burden from previous governments since 1965, some three years before he was born on May 21, 1968.
According to the Commissioner of Finance, Sama’ila Aliyu, in 2006, there was reconciliation and sharing of debt obtained as far back as 1965 between Kaduna state and Katsina state which was carved out of the old Kaduna state. The actual balance outstanding against Kaduna state, according to him, was USD84,995,475.13.
“They are loans obtained from multilateral institutions such as the world Bank, International Development Bank (IDA) and Africa Development Bank (AfDB),” Aliyu said, explaining further that, “over the years, subsequent administrations in the state continued to borrow from these financial institutions for various infrastructural development projects amounting to USD185,968,750.26.”
In spite of the apparent gloomy picture though, the global economy rating agency, Fitch, late last year, rated Kaduna’s long-term foreign and local currency Issuer Default Ratings (IDRs) as B+ and National Long-term rating as A+(nga) describing the outlooks as stable.
The agency based its rating of the state on various indicators including efforts by the state government to increase Internally Generated Revenue (IGR) as well as provision of capital to Small and Medium Enterprises especially in the agriculture sector. Fitch said the key rating drivers were “the expectations that Kaduna state will continue to achieve a healthy financial performance amid mild growth in local taxes and subsidies from the Federal Government.”
Whatever the circumstances, El-Rufa’i says he will embark on certain economic reforms because, “there are areas of leakages, corruption practices that we plan to tackle and there is large capacity to expand internally generated revenue.” Apart from these efforts, he said, “there will be reformation of state institutions to instill a culture of probity that insists on value for money, that ensures that government procurement occurs at the most cost effective level and encourages personal responsibility.”
