The Tax Justice and Governance Platform (TJGP) has warned Jigawa state about the escalating internal and external debts. The state’s loans have surged by 60.11 percent, amounting to over N60.36 billion from 2016 to 2021.
This information was disclosed by the Executive Director of the Prime Initiative for Community Development and Fiscal Transparency, Mr. Muhammad Abdu Dutse, during a press conference in Dutse. The event focused on the national Economic Challenges and Public Debt Management in Jigawa State, organized by the Tax Justice and Governance Platform (TJGP) in collaboration with civil society organizations and stakeholders.
Mr Muhammad Abdu Dutse explained that the recent increase in domestic debt has accumulated to ₦43.13 billion in the year under review. Despite consistently ranking high in debt sustainability, recent trends in revenue generation and debt accumulation demand urgent attention and proactive measures to safeguard the economic stability and prosperity of the state.
He highlighted, “Over the past five years, Jigawa State has witnessed a concerning decline in revenue generation, aligning with the national trajectory. This decline has resulted in budget deficits and necessitated borrowing to meet essential expenditure obligations.”
“Despite maintaining a prudent debt management strategy, the state’s total debt has increased to ₦63.36 billion as of June 30, 2023, reflecting both domestic and foreign components.”
Mr. Muhammad Abdu Dutse emphasized that “the recent increase in domestic debt to ₦43.13 billion and a slight decrease in foreign debt to ₦20.23 billion underscore the need for careful monitoring and proactive debt management measures.”
He further stated, “Considering these developments, the Tax Justice and Governance Platform (TJGP), in collaboration with civil society organizations and stakeholders in Jigawa State, emphasizes the imperative of addressing these economic challenges and charting a sustainable path forward.”
The group has recommended several measures to the state government tailored to the specific context aimed at enhancing fiscal management, revenue mobilization, and debt sustainability.
The Prime Initiative for Community Development and Fiscal Transparency advocates for conducting a thorough investigation into the utilization of loans acquired by the State Government, ensuring transparency and accountability in expenditure allocation, revising legal and institutional frameworks related to debt management to reinforce transparency and accountability measures, including expediting the amendment of relevant fiscal responsibility laws.
Other recommendations include redefining the purpose of borrowing to prioritize projects that promote value chain development, infrastructure enhancement, and strategic human capital development, halting borrowing for non-productive expenditures and focusing resources on initiatives that foster economic growth and development, and strengthening mechanisms for debt sustainability assessments through public debt review mechanisms to mitigate risks associated with new borrowing initiatives.
“Harmonizing tax laws and rates to streamline revenue mobilization efforts and eliminate overlaps, ensuring a fair and efficient taxation system, curtailing the discretionary powers of executive institutions in granting tax incentives, with major incentives requiring approval from the State Assembly.”
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