71% of Abia State’s 2024 Budget to be Funded by Borrowing

Abia State, led by Governor Alex Otti of the Labour Party, is making headlines with its ambitious fiscal plan for the upcoming year. The state government aims to finance a staggering 71% of its 2024 budget through borrowing, marking a significant reliance on external funds.

The proposed budget, amounting to N567.2 billion, was presented to the assembly members on December 12. In a detailed analysis, the state disclosed its intention to secure N166,077,717,058 in revenue. This includes funds generated internally, allocations from the Federation Accounts Allocation Committee, and income from various other sources, contributing to 29% of the total budget expenditure.

Statisense, in its examination of the figures, highlighted that the remaining 71% of the budget is anticipated to be sourced through borrowing. This approach has sparked concerns and discussions about the potential consequences of accumulating a substantial amount of debt.

Back in June, Mike Akpara, the Special Adviser to Governor Alex Otti on Finance, revealed that the state already carried a debt of N191,239,307,593.67 billion in both domestic and foreign loans. If the Abia State Assembly gives the green light to the proposed budget, it could lead to a record-high debt portfolio for the state.

The decision to heavily rely on borrowed funds has raised eyebrows, with citizens and experts questioning the sustainability and long-term implications of such a financial strategy. The increased debt load, if approved, will undoubtedly pose challenges for the state’s economic outlook and fiscal health.

Source: Daily Post