Why Benue State is Structured to Stay Underdeveloped

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    Is Benue state really underdeveloped?

    It depends on who you ask and what you mean by ‘underdeveloped’.

    If you choose social infrastructures to gauge if Benue state is underdeveloped then you might just have picked the right criteria.

    According to available evidence as contained in the state financial statement from 2015-2020, Benue state government is not committed to spending on capital projects.

    An analysis of the state’s financial audited report in the last 6 years 2015-2020 paints a despairing picture of the state’s capital expenditure spending.

     And if it continues that way, Benue state may stay underdeveloped in terms of infrastructures for a much longer time than imagined.

    By 2023, Benue state like the rest of the country would have reached 24 years since the return of democracy in Nigeria.

    That will be about a quarter of a Century!

    And Benue state will be still be lacking the basic infrastructure it needs to grow its economy.

    Benue state capital expenditure spending is very Low!

    If you are wondering while Benue state lacks the necessary basic infrastructures the graphic below explains it all.

    As can be seen from the graphic, Benue state spends much more on personnel cost and overhead cost than on capital expenditure compared to Ebonyi state.

    This high spending on personnel and overhead cost has serious consequences on the state’s ability to invest in capital projects which has a long term impact on the state’s economic development.

    It is obvious that something is wrong with the state’s fiscal management .

    And given this spending pattern it is obvious that Benue state may lack key infrastructures unless the spending on capital project improves to above 50% of its’ earned revenue.

    In addition, the high percentage spent on personnel cost shows that the government in the state is only working for the 1% of the population and which obviously shows that Benue state is structured to stay underdeveloped.

    Is Benue state ‘Fiscally challenged’ or Fiscally Mismanaged?

    There are many questions that need answers.

    According to official documents in open data, Benue has gotten as must as N642billion from June 2015- December 2020.

    This is inclusive of the federal allocations to the 23 Local Governments, Paris club refunds, loans collected and Internally Generated Revenue.

    And the break down shows that the state is dependent on the federal government for its survival.

    About 88% of its statutory earned revenue comes from the monthly FAAC allocation, while 12% is from the State IGR.

    But how the states’ fund is spent is the major concern.

    Though the government of former Governor Gabriel Suswam may have fared better in its capital expenditure spending but it still fall short of what the state desires.

    In all, it’s quite clear that the Benue state government spending on capital expenditure explains the near absence of quality infrastructure in the state.

    According to an analysis of the state’s financial statement from 2009 – 2020, the state government earned from all sources about N1.2 trillion.

    And the total capital expenditure in the last 12 years is under N200billion.

    So what happened to the One Trillion naira balance?

    Rising Domestic Debt……But…what are they doing with the Borrowings?

    Benue state domestic debt in 2014 which was Governor Suswam last full year in office was N17.8bn

    And as at end of 2020 the state domestic debt profile has risen to N126bn an increase of over 600%.

    Benue state Debt Profile

    So why is the state’ s debt profile rising high while it is spending less on capital expenditure but spending high on personnel and overhead cost?

    What is Benue state government under Ortom doing with its borrowings?

    Is it borrowing loans for consumption?

    Another fiscal puzzle that needs explanations.

    Is Benue state in a Fiscal Mess?

    The published financial statements has revealed that Benue state is in a serious fiscal mess than imagined.

    The state audited report between 2015- 2020 clearly shows a worrying concern of how the state finances are managed:

    State spending on overhead cost is very high

    The state personnel cost is also very high

    The state spends very little on capital project

    The state debt profile is growing higher

    So, Benue state might not be ‘fiscally challenged’ as such but rather that the state funds are just been badly mismanaged.

    information in this piece are well sourced from official documents available in open data and we encourage our readers to visit shared link to verify.

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