A recent revelation from the Central Bank of Nigeria (CBN) indicates that Kogi State, along with 30 other states, is part of the total N339.9 billion debt owed to the apex bank. This debt was incurred between 2015 and 2023 and was primarily obtained to offset workers’ salaries.
The funds were accessed through the Salary Bailout Facility (SBF), a strategic initiative by the CBN aimed at easing fiscal pressures faced by state governments. Notably, Kogi State received N20.26 billion from this facility, making it one of the top beneficiaries.
Despite the substantial disbursement of N457.17 billion to the benefiting states, only a fraction has been repaid. As of September 2023, the outstanding debt stood at N339.97 billion, with an additional loan default of N1.31 billion.
The states involved in owing bailout funds to the Central Bank of Nigeria (CBN) are as follows:
- Imo
- Kogi
- Kano
- Oyo
- Osun
- Bayelsa
- Ondo
- Yobe
- Sokoto
- Taraba
- Plateau
- Niger
- Nasarawa
- Kebbi
- Katsina
- Jigawa
- Gombe
- Ekiti
- Ebonyi
- Borno
- Benue
- Bauchi
- Adamawa
- Akwa Ibom
- Cross River
- Abia
- Delta
These states collectively owe the CBN a total of N339.9 billion in bailout funds.
The inability of states to meet their salary obligations has been a pressing issue, prompting concerns about workers’ welfare and productivity. Last year alone, several states, including Kogi, resorted to borrowing from banks to meet salary payments, exacerbating their financial strain.
The situation underscores the urgent need for fiscal responsibility and innovative financial management practices among state governments. As the debate over increasing the minimum wage continues, it is imperative for states to prioritize revenue generation and prudent expenditure to avoid over-reliance on federal allocations.
Financial experts have emphasized the importance of embracing financial innovations to enhance revenue generation and mitigate the recurring challenge of salary payment delays. The current economic climate necessitates proactive measures to ensure sustainable financial stability and effective service delivery at the state level.
In light of these challenges, Kogi State, like other indebted states, faces the imperative of implementing robust fiscal policies to address its financial obligations and promote economic growth and development.
