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State Governments Revenue To Be Strained over High Debt-To-Revenue Ratio

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Eniola Olayemi

 
The revenue of the states in the country will be further strained in the coming months owing to their rising debt portfolio and cost of servicing those debts.

This is coming on the back of the latest report on the states’ internally generated revenue by the National Bureau of Statistics (NBS), tagged, “Internally Generated Revenue at State Level”, which showed a high debt to revenue ratio for the first half of 2018 (H1’18).

The report showed that total states’ Internally Generated Revenue, IGR, grew by 27.7 percent year-on-year (y/y) to N579.40 billion from N453.83 billion in H1’17.

Of the 36 states, 28 states grew their IGRs, while states such as Ebonyi, Anambra, Benue, Abia and Kebbi recorded declines in IGR by 21.79 percent to N2.46 billion, 21.62 percent to N7.07 billion, 18.86 percent to N6.06 billion, 12.29 percent to N6.98 billion and 10.85 percent to N2.03 trillion respectively in H1 2018.

Lagos retained its number one spot, with an IGR of N196.4 billion, up 16.9 percent y/y and Rivers State recorded N60.9 billion, the second largest state by IGR.

The report showed that not much changed in terms of revenue sources as federation account allocation inflows continued to account for more than 70 percent of the total revenue (FAAC + IGR) for most states. Net federation accounts allocation to states grew y/y by 65.14 percent to N1.23 trillion in H1 2018 from N0.74 trillion in H1 2017 amid increases in production and price of crude oil.

The states’ total debt stood at N4.78 trillion in the year under review, comprising of N1.30 trillion external debt and N3.38 trillion domestic debt.

The high debt to revenue ratio, according to economy watchers, will put more pressure on fiscal operation of the states and also make implementation of capital expenditure more difficult.

In his reaction, Mustapha Wahab, a research analyst at Cordros Capital Limited, explained that adding growing debt to servicing cost and to the already depressed state revenues will put pressure on their fiscal operation. He said: “Currently a number of states can’t cover their recurrent expenditures on the back of insufficient FAAC allocations despite gains from higher crude prices relative to last year and significantly low internally generated revenues.

“Adding growing debt service cost to the already depressed state revenues will further put pressure on fiscal operations of the federating units, the impact of which will not only make capital expenditure, CAPEX, implementation a tall order but overhead spending also.”

According to him, the situation would mean growing risk of default on interest and principle payment for the states. He urged the states to increase their IGR to reduce the impact of declining crude oil price. “With IGR to FAAC ratio remaining abysmally low, states government must ramp up internally generated revenues to reduce the impact of volatile oil earnings on fiscal performance by significantly expanding the tax base and considerably monitoring revenue generating state owned corporations to effectively block all loopholes,” he said.

Cowry Asset Management, a Lagos-based investment banking firm, said: “Given states’ IGR of N579 billion and net Federal Accounts Allocation of N1.23 trillion in H1 2018, ‘dependency multiple’, FAAC to IGR, was 2.13 times.

In spite of the y-o-y increases in IGR and net Federation Accounts Allocation to the states by 27.7 percent and 65.14 percent respectively, the states’ average total debt to gross revenue still remained high at 2.75 times in H1 2018.

“We opine that high debt to gross revenue ratios of the states would further increase their debt servicing costs which in turn would burden future generated income of the affected states going forward, given that most of the borrowed fund would have gone into recurrent expenses such as payment of salaries.”

In a report titled, “State of States IGR in H1’18: Creating more “Lagos” across Nigeria”, analysts at United Capital Plc, another investment banking firm, emphasised the need for the state to up their IGR in line with Lagos State while expressing concern at the underwhelming performance of other states.

They also pointed out the need to expand the revenue base across states, saying that it would reduce dependence on FAAC inflows, which is largely exposed to the vagaries of the oil market. Increasing the revenue base of the states, according to them, would limit future fiscal crisis. “In addition, this would boost the credit ratings of states and enhance their ability to finance developmental projects,” they said.

“Further analysis of the IGR report indicated that Pay As You Earn, PAYE, is two times the size of FAAC inflow in Lagos and 1.1 times in Ogun States, implying that both states are significantly benefiting from a dominant formal sector relative to other states. Hence, to create more “Lagos States” across the country, there is a need for a concerted effort to develop the formal sector in the rest of the country. Put differently, tax authorities in other states may need to find creative ways to boost revenue from the informal sector going forward,” they asserted.

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Nigeria Government, UN launch US$159 million plan to avert food security and nutrition crisis in Borno, Adamawa and Yobe states

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Nigeria Government, UN launch US$159 million plan to avert food security and nutrition crisis in Borno, Adamawa and Yobe states

AJAGBE ADEYEMI TESLIM

SPONSORED BY: H&H

Nigeria’s Federal Minister of Humanitarian Affairs and Poverty Reduction, Professor Nentawe Goshwe Yilwatda and the UN Resident and Humanitarian Coordinator in Nigeria, Mohamed Malick Fall, today launched the 2025 Lean Season Response Plan for Borno, Adamawa and Yobe (BAY) states in north-east Nigeria.

The Plan seeks US$159 million for urgent nutrition, food, and health interventions and other life-saving assistance for 2 million people in most severe need in the BAY states over the next six months.

In the BAY states, 1 million children are at risk of severe acute malnutrition (SAM) in 2025 – double the number in 2024. Of these children, over 600,000 are at risk of SAM over the next six months. Without access to lifesaving nutrition services, they may die.

An estimated 4.6 million people in the BAY states are also projected to face acute food insecurity during the *lean season starting in June – according to the Government-led Cadre Harmonisé food security analysis results released in March 2025. This marks the sixth consecutive year of severe conditions.

In his remarks at the launch of the Plan in Abuja, Minister Yilwatda emphasized the need for urgent action. “This Plan is not just about structures and strategies. It is about a promise that no child in Borno, Adamawa, or Yobe should have to sleep hungry when the world has enough food; that no mother should lose a child to a condition we know how to treat, and that dignity must never be a casualty of conflict or poverty,” he said.

He also reaffirmed the Federal Government’s commitment to leading the response, aligning it to national policies.

The BAY states are grappling with a 15-year humanitarian crisis, which has been intensified by prolonged conflict, economic instability, and climatic shocks. Significant funding cuts for humanitarian operations in 2025 have multiplied the severity of needs and limited access to much-needed lifesaving support.

The health and nutrition sectors have been particularly impacted in the BAY states, with up to 70 per cent of health services and 50 per cent of nutrition services affected. This is threatening gains in malnutrition prevention and treatment.

“Humanitarianism is under threat; solidarity is in short supply, and the lack of resources is putting millions, especially children, at risk,” the UN Resident and Humanitarian Coordinator in Nigeria, Mohamed Malick Fall, said. He reiterated the critical role of Government leadership and the need for the private sector and emerging donors to support humanitarians to address the alarming needs.

Early action is critical to mitigate the worst impacts of the lean season on children under the age of five and pregnant and breastfeeding mothers. The lean season response plan focuses on the most immediate lifesaving needs, including food assistance, emergency healthcare, nutrition, water, sanitation and hygiene, protection, and agricultural livelihoods. It also calls for sustained investments in locally led responses for longer-term resilience.

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NITDA, SECDOJO, SIGN MOU TO STRENGTHEN NIGERIA’S CYBER RESILIENCE

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AJAGBE ADEYEMI TESLIM

SPONSORED BY: H&H

In its continued effort toward the implementation of the present administration’s agenda of strengthening national security by committing to robust cybersecurity measures and digital trust to safeguard the nation’s digital infrastructure as well as contribute to the overall peace and prosperity of the nation, the National Information Technology Development Agency (NITDA), has signed a Memorandum of Understanding with SecDojo, SAS, a Cybersecurity training and upskilling company with headquarters in France, to strengthen national resilience against cyber threats through targeted capacity building initiatives.

The Director General of NITDA, Kashifu Inuwa CCIE, and Chief Executive Officer of SecDojo, Mr. Younes Benzagmout at the signing ceremony, which took place during GITEX Africa 2025 in Marrakech, Morocco.

August24news.com Editor gathered that the signing ceremony took place during GITEX Africa 2025 event in Marrakech, Morocco, with the Director General of NITDA, Kashifu Inuwa CCIE, and Chief Executive Officer of SecDojo, Mr. Younes Benzagmout, representing both organisations.

This strategic partnership is designed to bolster Nigeria’s cybersecurity landscape through comprehensive capacity-building initiatives.

The collaboration will focus on the establishment of a Cybersecurity Academy, delivery of advanced training and simulation programmes, development of customised curricula and educational resources, and facilitation of research, knowledge sharing, and professional exchange programmes.

Speaking at the signing ceremony, Inuwa expressed his enthusiasm about the collaboration, describing it as a key milestone in Nigeria’s journey toward a secure digital future.“We just signed an MOU with SecDojo, which is a cybersecurity capacity-building provider, and this is one of our efforts to strengthen our national cybersecurity to enhance our cyber resilience,” he noted.

He asserted that as Nigeria continues its digital transformation journey, investing in human capital is paramount, describing people as the technology component of any innovation ecosystem.

inuwa also noted the growing global demand for cybersecurity professionals and emphasised Nigeria’s potential to fill the talent gap, given its large and youthful population.“Globally, we have the gap, and in Nigeria, we have a young population that if we harness, well, we can train them and connect them with the global value chain to provide cybersecurity services and also to fill some roles and gaps in the global cybersecurity market,” he averred.

While pushing for digital skills integration into Nigeria’s formal education system, the DG called for deeper collaboration between technology stakeholders and the Federal Ministry of Education to embed digital literacy and cybersecurity training into Nigeria’s formal education system.

He stated that, there is an urgent need to shift from short-term skills acceleration programmes to long-term, systemic integration of digital skills into academic curricula at all levels, from primary to tertiary education.

“For me, this goes beyond NITDA. I see a national opportunity, one that involves the Ministry of Education, to institutionalise digital literacy through formal education,” he said. “Currently, what NITDA offers are skills acceleration programmes because these critical digital competencies are not taught in schools.

But to prepare for the future, we must embed these skills into our national education framework,” he added.

Highlighting successful models such as Cisco’s academic integration, which allows students in over 100 Nigerian universities to earn both degrees and professional certifications simultaneously, he stressed the benefits of a dual-track learning system that equips graduates for immediate relevance in the digital economy.

He noted that while Cisco has led the way, the ecosystem must be open to multiple partners, especially those aligned with Nigeria’s National Digital Literacy Framework, and encouraged tech firms and content providers to collaborate, offering open-source or customized content that can be adopted nationally.

“We don’t want to limit this to a single vendor. The opportunity is open to all.

Google has shown interest, and we welcome more partners. There are committees already working with the Ministry, and we’d love to see more stakeholders at the table,” he concluded.

In his remark, Mr Benzagmout, expressed his enthusiasm for the collaboration and reaffirmed the company’s commitment to working closely with Nigerian stakeholders.

He noted that the collaboration aims to bring SecDojo’s innovative training platforms and methodologies to support Nigeria’s cybersecurity professionals while contributing to the development and execution of a comprehensive national cyber capacity-building strategy.

“We sincerely thank NITDA for their trust and partnership and we are excited to begin this journey and look forward to building a successful and impactful collaboration,” he assured.

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Transcorp Hilton Announces Great Offerings For Coming Easter Holidays

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AJAGBE ADEYEMI TESLIM

SPONSORED BY: H&H

Transcorp Hilton Abuja Announces Great Family Offerings This EasterAs families across Nigeria prepare for the Easter holidays, Transcorp Hilton Abuja is positioning itself as the premier destination for a memorable and stress-free getaway.

With spacious accommodations, a delectable Easter Sunday Brunch, engaging activities for all ages, and a commitment to safety and convenience, the iconic hotel is ready to welcome families seeking quality time together in the Federal Capital Territory.

For families traveling with children or extended relatives, Transcorp Hilton Abuja offers a diverse range of thoughtfully designed rooms and suites.

These expansive accommodations provide ample space for relaxation and connection, ensuring a comfortable stay where families can truly unwind and enjoy each other’s company without feeling confined.

Each room is equipped with modern amenities to cater to every need.

A highlight of the Easter celebration at Transcorp Hilton Abuja is the highly anticipated Easter Sunday Brunch at the hotel’s Bukka Restaurant.

Renowned for its authentic local flavours and international cuisine, Bukka will present a special Easter spread featuring traditional delicacies alongside a tempting array of classic and creatively themed Easter desserts.

This promises to be a delightful culinary experience for the whole family to share.Beyond comfortable lodging and exceptional dining, Transcorp Hilton Abuja is dedicated to creating fun and engaging moments for guests of all ages.

The hotel will feature a lively DJ-led poolside experience, allowing adults to relax and soak in the festive atmosphere. Younger guests will be thrilled with the hotel’s well-equipped playground, providing a safe and exciting space to expend energy while parents can relax nearby.

This balanced approach ensures a fulfilling experience for every family member.

Recognizing the paramount importance of safety for traveling families, Transcorp Hilton Abuja maintains a secure environment with professional and attentive staff. From the hotel premises to guest interactions, every aspect is designed to provide parents with peace of mind, allowing them to fully relax and enjoy their time together.

To further ease the complexities of family travel, Transcorp Hilton Abuja collaborates with reputable third-party ticketing and logistics operators.

Guests can conveniently arrange transportation, book local excursions, and plan their Abuja adventures directly through the hotel’s trusted partners, eliminating the stress of independent planning.

The ambiance at Transcorp Hilton Abuja is described as a harmonious blend of luxurious comfort and warm, welcoming hospitality. Guests can unwind by the inviting pool, explore the hotel’s serene gardens, and enjoy the attentive service of the dedicated staff.

The overall atmosphere encourages relaxation and the creation of cherished family moments.More than just a place to stay, Transcorp Hilton Abuja aims to be the backdrop for unforgettable family experiences this Easter.

With its comprehensive offerings and commitment to guest satisfaction, the hotel invites families to create lasting memories in a comfortable, fun, and secure environment.

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