Yusuf Ishaku Goje
According to the BudgIT’s State of States 2024 edition, Kaduna State is grappling with a staggering debt burden, mirroring the national trend.
A startling 298.48% surge in debt between 2018 and 2023 has pushed the state’s total debt to N613.53 billion as of December 2023, with a per capita debt of N60,264,00
In the 4th quarter of 2023, the state drew down N26.67 billion in international loans, just a fraction of its N61.71 billion target. Fast-forward to 2024, the state’s revised budget reveals an even more aggressive borrowing target of N211.54 billion, with N53.77 billion secured by October.
This presents a twin challenge. No doubt, the underperforming loans continue to undermine the State’s budget credibility and hinder maximum capital expenditure, while notwithstanding increasing our debt, particularly in foreign loans, which continue to expose the State to exchange rate volatility.
Not relenting, Kaduna State’s 2025 budget reveals an ambitious borrowing plan by the government, with a whopping N200.95 billion in international loans.
Here’s the breakdown: Multilateral Loans account for N170.96 billion, sourced from the African Development Bank (N14.17 billion), International Development Association (N154.77 billion), and Islamic Development Bank (N2.00 billion). The remaining N30 billion comes from Bilateral Loans.
Debt service, however, poses an immediate challenge. In 2024, the revised budget allocated N52.68 billion for debt service, with N40.79 billion expended by October. Looking ahead to 2025, the state government faces an even heavier burden, requiring N70.84 billion to service its debt.
The 2025 debt service is staggering: comparatively by size, it is 63.17% of budgeted IGR, 20.82% of Government Share of FAAC, 29.67% of total recurrent expenditure, and a whopping 84.42% of personnel cost.
Similarly, by size it is a significant chunk of key sub-sectors capital expenditure: 34.30% of education, 55.78% of health, 65.34% of Public Works & Infrastructure, and a staggering 95.74% of agriculture allocation.
The million-dollar question: have we gotten value for money from the utilization of the loans borrowed over the years? While a number of projects have undoubtedly benefited from the borrowings, the real concern is whether these investments have delivered economy, efficiency, effectiveness, and equity. Can we guarantee that the projects will last more than a decade without needing major repairs?
This cannot be ascertained as the procurement process for the projects has largely been opaque, with transparency and accountability taking the back seat. Similarly, performance audits are yet to be carried out by the Office of the Auditor-General on these projects.
Building schools, hospitals, and roads with loans is just the starting point. However, the real major success of a government lies in whether these investments translate into tangible results: improved learning outcomes, reduced child and maternal mortality, and a boost to inclusive economic prosperity.
Kaduna State has crossed many of the debt sustainability thresholds, and its credit risk profile is looking bleak.
The current administration’s term will end in four or eight years, but if citizens don’t demand answers and hold the government accountable, the state will remain stuck in a vicious cycle of government come, government go and the debt keeps rising.
The alarming reality is that the future generation will inherit the consequences of today’s actions. Let us make it a positive one.
Goje is an active citizen, a civil society member, and an OGP enthusiast
