Kaduna State: The debt dilemma and governance paradox

In the heart of Northern Nigeria lies Kaduna State, a land steeped in potentials yet shackled by the weight of mismanagement, deceit, and hoping fervently for a leadership capable of mobilising its citizens towards a shared prosperity. Recent revelations have peeled back the layers of obscurity, exposing a state burdened by an astronomical and rising debt profile, second only to that of Lagos.

What’s particularly alarming is the role played by the incumbent resident of Kashim Ibrahim House, who, prior to his accession, spearheaded the approval of a substantial loan from the World Bank during his sojourn at the National Assembly. Now, faced with the repercussions of his actions of a badly planned financing of developmental programmes, he laments the lack of funds for essential projects not withstanding receiving a humongous and monstrous monthly FAAC receipts from Abuja for the benefit of the entire citizens of Kaduna State and is only able to meet basic obligations such as civil servant salaries by the whiskers.

Another perplexing issue is the convoluted narrative of political patronage and betrayal that underpins this financial quagmire.

Inherited Debts

Ranking as the second highest in Nigeria’s debt hierarchy, Mr Governor said he inherited significant debts from the previous administration led by Malam Nasir, who was his benefactor, bosom friend, “oga at the top” etc., which comprises $587million (foreign, equivalent to N705bn at N1200/$ as at 3/4/2024), N85bn(domestic) and N115bn (contractual liabilities).

A most pertinent question to ask here is: do the above debts include all or some or none of the following?

i. Outstanding payments to ad hoc, contract, NYSC or other ancillary staff?

ii. Outstanding salaries for either teachers or health workers or core civil service staff?

iii. Are there outstanding Accrued Rights Benefit in the Contributory Pension Scheme of pensioners and families of deceased staff?

The service compact agreement promised by Mr Governor

His Sustain Manifesto 2023, ‘meaning continuing from somewhere’, includes a 7-point agenda focusing on the development of the state as follows: Safety and Security, Upgrade of Infrastructure, Strengthening

Institutions, Trade and Investment, Agriculture, Investment in Human Capital, and Nurturing Citizen Engagement.

Wait a second, a. How much is the implementation of the 7-point agenda supposed to cost and in how many years?

b. Will there be implementation of the 7-point agenda or ‘sustenance’ of ongoing projects as the massive FAAC allocation gets eaten up?

c. What about the welfare of citizens?

Inability to answer these three questions portrays Nigeria’s democracy as a farce!

The circus and the clowns

Based on the Debt Sustainability Framework for LowIncome Countries (LIC DSF) used by the World Bank and the IMF, Debt Sustainability is a country’s/ state’s ability to manage its debt without requiring debt relief or accumulating arrears or default on its obligations.

Meanwhile Debt Sustainability Ratio (DSR) compares the country’s/state’s debt levels against its ability to repay, considering its income, economic growth and other relevant financial indicators.

A Debt Sustainability Analysis (DSA) is a structured examination of a country’s debt-carrying capacity (strong, medium or weak) over 10 years, vulnerability to economic and policy shocks and based on indicators such as Debtto-GDP Ratio, Debt Service-toRevenue Ratio, Debt Service-toExports Ratio, Primary Fiscal Balance, Net Present Value (NPV) of Debt-to- Exports Ratio, External Debt-to-Exports Ratio and Public Sector Borrowing Needs.

Once the indicative thresholds show a positive sign, government at all levels feel they have the capacity to secure debts but alas, that’s wrong.

These indicators are meant to help analysts determine the risk of debt distress and guide borrowing decisions to maintain debt at sustainable levels but not to accumulate debts simply because ‘government is continuum’.

A tale of political intrigues

Distressingly, in a Machiavellian manoeuvre, mallam anointed his senator to succeed him from the ranks of ‘his own”, only for citizens to witness the same protege spearheading a relentless cry of lack of funds for essential projects and a struggle to meet basic obligations.

Now, with coffers depleted and faced with the repercussions of his actions, the cry of fiscal incapacity reverberates through the corridors of power, leaving citizens welfare and development projects in limbo.

What’s particularly abhorrent is the intricate web of political manoeuvres, self-serving actions that have contributed to this fiscal debacle, and has highlighted tensions and breakdown in the relationship between the anointer and the anointed.

Scratching the dirt

Compounding the issue is the close-knit network of political affiliations that seem more concerned with self-preservation than public service.

The governor’s ascent to power was facilitated by his predecessor, and his administration comprises key individuals and members of the past administration, who we are told will help with institutional memory, policy formulation and implementation from the same political circle, raising questions about their complicity in the state’s financial mismanagement.

But the rot runs deeper still. Nepotism rears its head as the son of the former governor, once his legislative aide, now brazenly denounces his former mentor as clueless.

Economic Strains and Public Welfare

The agencies entrusted with safeguarding public welfare and provision of services have been perverted into instruments of

extortion. Examples:

I. The state’s road traffic and enforcement agency, originally envisioned as a regulatory body, has devolved into a cashgenerating enterprise, preying on hapless citizens with exorbitant fees, charges and fines that burden the already strained finances of the citizens.

II. Similarly, the lands registry, due to bureaucratic inefficiencies, has led to a perception of governance akin to an advance fee fraud scheme, transforming public institutions into veritable black holes of inefficiency and apathy.

Public Servants or public burden

According to the Kaduna State Bureau of Statistics (KSBS) website, the projected population of the state is 10.4m as at 2023. Meanwhile, in an interview granted by mallam sometimes around May 2016, there are less than 100,000 persons employed in the civil service.

Averagely, the state’s monthly FAAC receipt is N10bn and about N7bn gets consumed for debts servicing and repayment, leaving a huge N3bn for essential expenses.