Business
‘States Don’t Executed 40% Capital Expenditure In Budgets’
Fitch, a credit ratings company, has revealed that state governments in Nigeria do not execute 40 per cent of the Capital Expenditure (CAPEX) in their various annual budgets.
In its latest Nigerian States Framework Report posted on the website, the global ratings firm, highlighted how debt servicing affects state governments’ ability to execute CAPEX.
According to the latest credit ratings report on Nigeria, the country’s Long-Term Foreign-Currency Issuer Default Rating was affirmed at ‘B-‘ with a positive outlook.
It also projected that non-performing loans of Nigerian banks will increase in 2024 on the back of high interest rates and inflation in the country.
The latest analysis framework report, also revealed that all Nigerian states rated by Fitch are on Positive Outlook, reflecting that of the sovereign (B-/Positive) and the Federal Government of Nigeria’s policies that affect states’ operating revenue, debt stock, and debt service.
“The free-floating naira exchange rate has consistently increased external debt service, eroding the share of FAAC available for autonomous spending, as external debt is serviced through direct deductions from transfers.
“Most Nigerian states rely on subsidised facilities from the federal government to finance their investments. Despite significant capital expenditure needs, states struggle to fully utilise budgeted capex due to funding and implementation constraints, with an average of only about 60 per cent of budgeted capex executed”, it stated.
The report added that Nigerian states face several challenges as Internally generated revenue growth remains subdued due to socioeconomic constraints and inefficiencies in tax collection.
It continued that Most states depend on FAAC transfers, with Lagos being an exception due to its higher IGR capabilities. Rising current spending, driven by high inflation and recent increases in the minimum wage, further pressures state finances.
“Fitch views the institutional framework for the Local and Regional government sector as evolving due to limited own-revenue-generation capacity, evolving debt and liquidity-management regulations and practices amid the devolution of a wide set of responsibilities to the states.
“States have to provide key public services, such as healthcare and education, creating vertical fiscal imbalances that can result in structural funding gaps, in turn leading to higher debt or a propensity to offload risks off-balance sheet”, it stated.
In October, a new report by civic-tech organisation, BudgIT, revealed that 32 out of Nigeria’s 36 states relied on allocations from the Federation Account Allocation Committee for at least 55 per cent of their total revenue in 2023.
The report highlighted the over-dependence of many states on federal transfers, which makes them vulnerable to external shocks particularly those linked to oil revenue and federal disbursements.
Corlins Walter
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The Federal Government has approved a whooping $1bn credit facility to support Nigerian exporters and small scale businesses to take advantage of the African Continental Free Trade Area (AfCFTA) in order to boost production, competitiveness and intra-African trade.
The $1bn AfCFTA Adjustment Fund Credit Facility is also expected to address some of the financing gap being faced by Nigerian exporters and enhance the competitiveness of African businesses within the continental market.
The Minister of Industry, Trade and Investment, Jumoke Oduwole, disclosed this during the second quarter 2026 meeting of the AfCFTA Central Coordination Committee held in Abuja.
According to a statement issued by the ministry’s Head of Press and Public Relations, Obilor-Duru Okechi, Oduwole said the financing facility represented a major opportunity for Nigerian businesses seeking to expand operations, modernise production processes and increase exports to African markets.
The statement partly read, “?The Federal Government has reaffirmed its commitment to accelerating Nigeria’s export-led growth agenda under the African Continental Free Trade Area, unveiling opportunities for businesses to access a US$1 billion AfCFTA Adjustment Fund Credit Facility aimed at boosting production, competitiveness, and intra-African trade.”
She noted that despite the progress Nigeria had made in implementing the continental trade agreement, many local businesses continued to face obstacles that limited their ability to take advantage of the single African market.
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“Many businesses still face challenges relating to export documentation, certification, standards compliance and market access,” the minister said.
She explained that the Federal Government was addressing these bottlenecks through enhanced trade facilitation measures, simplified AfCFTA guidance tools, stakeholder engagement programmes and stronger collaboration with institutions such as the Nigeria Customs Service and the Nigerian Export Promotion Council.
Oduwole stressed the need to strengthen Nigeria’s legal and regulatory framework by domesticating key AfCFTA protocols, particularly the Digital Trade Protocol, to position the country as a major player in Africa’s growing digital economy.
The minister also highlighted some of the gains recorded in Nigeria’s AfCFTA implementation efforts.
According to her, the expansion of Nigeria’s Air Cargo Corridor Initiative to Rwanda, increased collaboration with development partners and private sector players, as well as sustained engagement with state governments, were helping to deepen awareness and participation in the continental market.
In her welcome address and first-quarter update, the National Coordinator and Chief Executive Officer of the Nigeria AfCFTA Coordination Office, Mrs Patience Okala, provided details of the financing initiative.
Okala said the $1bn AfCFTA Adjustment Fund Credit Facility was targeted at large African businesses with a minimum financing capacity of $10m.
She revealed that the National AfCFTA Coordination Office was working closely with fund managers to facilitate access for eligible Nigerian companies and had begun assembling a pilot group of businesses to ensure that Nigeria maximised the opportunities provided by the facility.
Nkpemenyie Mcdominic, Lagos
The National Inland Waterways Authority (NIWA) has advised Nigerians against boarding boats that require constant bailing of water in the interest of their safety.
NIWA Area Manager for Cross River and Ebonyi, Mr Stanley Onuoha gave this warning in an interview with Newsmen in Calabar.
Onuoha who spoke on waterway
safety, said that passengers should take responsibility for their safety by inspecting boats before embarking on any journey.
According to him, repeated scooping of water from a boat is a clear indication that the vessel may be leaking.
“If you are entering a boat and see people using a bailer to remove water, it is the first signal that the boat is leaking,” he said.
He urged passengers to check the integrity of boats, including seating arrangements and other visible safety features.
The Manager restated the importance of using safety jackets, saying that damaged jackets may fail during emergencies.
He further said that passengers should ensure that safety jackets were appropriate for their body sizes in order to guarantee effective flotation.
Onuoha reiterated the need for passengers to fill manifests before departure to aid accountability during emergencies.
The NIWA official further advised travellers to monitor weather conditions and avoid boarding boats when the weather is unfavourable.
According to him, poor weather conditions can trigger strong tidal waves capable of affecting small boats commonly used on inland waterways.
He said that waterway journeys should be embarked upon between 6.00a.m and 6.00p.m for clearer visibility.
Onuoha said the Authority had continued to sensitise riverine communities to the need for safety precautions during waterway journeys.
He stated that sustained awareness campaigns and enforcement measures had contributed to safety waterway safety in Cross River.
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