ASSESSMENT OF STATE DEBT BURDENS BY GEOPOLITICAL ZONES IN NIGERIA: AN APPRAISAL

GOODMAN DANIEL DIEGHA, PhD
Department of Economics, University of Africa
Toru-Orua, Bayelsa State, Nigeria
E-mail: Daniel_gdmn@yahoo.com
Tel: 08035481251

DR. DENNIS H. NWANYANWU, PhD
School of Foundation Studies, General Studies
Kenule Beeson Saro-Wiwa Polytechnic Bori
P. M. B. 20, Rivers State, Nigeria

Abstract;

This paper conducted an assessment of the performance of the 36 states of Nigeria considering the level of their debt burdens. The study assessed the debt burdens of states in the six geopolitical zones in Nigeria. Focus of the study was on states’ dependence on federal allocations, extra revenue for capital investment, fiscal bandwidth to borrow more funds and priority to invest more on capital expenditure. Materials were sourced from published journals, text books, and internet. The state hinged on “Overhang Debt Theory. The study adopted explorative review of debt burden of states ranking. It was found that; for limited dependence on federal allocations, for North-central, Taraba state had the highest ranking position while Lagos state had lowest ranking position. On remaining revenue for investment after loan repayment, Taraba state was ranked highest while Ebonyi state from South from South-East was ranked lowest. On the fiscal bandwidth to borrow more, Cross River state was ranked highest while Jigawa from North-West came lowest in the ranking position. On the priority to invest more in capital expenditure, Benue state was ranked highest while Ebonyi state came lowest in ranking. The paper suggested that government should prioritize her spending on projects. Non-viable projects should be avoided to curb spending. There should be revenue diversification to generate more funds for capital spending and government should adopt Russian approach by selling her oil in Nigerian currency at a reduced price to help increase the value of her currency.

Key words: Analysis, Debt Burdens, Geopolitical Zones, Nigeria, Appraisal