Cross River Cannot Pay Salaries Without Borrowing – Budgit Report

In Breaking News, Business & Economy, National News, Reports

By Ogar Monday

Despite the effort by the Cross River State Government to pay salaries of workers regularly, Budgit, a civic technology organization with interest in raising transparency in governance has said the state cannot pay salaries without borrowing.

This was contained in its 2017 Fiscal Sustainability Index that “looks at the ability of states to meet their recurrent expenditure obligations with their VAT revenue, internally generated revenue and advantage income, including the 13% derivation.”

The index which also takes as important, “states’ ability to meet their recurrent expenditure obligation with all revenue source — a test of prudent fiscal management,” listed Cross River as 32 out of 36 states.

Kano, Katsina, Rivers and Lagos top this portion of the index said Budgit which also seeks to raise the level of citizen engagement and accountability in public financing.

The group added that “In effect, only four states could meet their recurrent expenditure obligation without resorting to borrowing or tapping donor funds and other extra-budgetary revenue.”

The report also held that with Cross River State’s “Personnel Cost sitting at N56.78bn, and Overheads totalling N17.93bn, the projected Capital Expenditure of N226.48bn for 2017 comes off as somewhat unrealistic, owing to the general lesser purchasing power and lower demand brought on by the country’s current economic condition.

“These infrastructural expansion plans will also definitely jerk up Cross River’s debt profile, as her External and Domestic debt profile stood at $114.9mn and N128.14bn in 2016. Although the State has continued to fulfill her monthly Recurrent Expenditure obligations, other prospective revenue generation sectors, such as agriculture, have relatively minimal impact on her economy.”

The report advised that “Cross River must exploit the fact that she accounts for approximately 58% of forests in Nigeria; a vast 6,000 square kilometers. The State will have to find ways to sustainably manage these resources.

”The State could also potentially become a net exporter of palm oil by putting 500,000 hectares or more of farmland under palm oil plantation and creating jobs along the value chain. Cocoa cultivation is another commodity Cross River can delve into, provided its logistic infrastructure is extensively improved.”

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