Inside Delta
Okowa, Oborevwori spends N18bn servicing debt amid N13bn non-tax revenue in 2023
Written By: SaharaReporters
19 Dec 2024 04:29 PM
A review of Delta State 2023 Auditor General Report has revealed that the state government spent a staggering N18 billion on debt servicing in 2023, despite generating N13 billion in non-tax revenue during the same period.
The state was governed from January to May 2023 by Ifeanyi Okowa before he was succeeded by the incumbent governor, Sheriff Oborevwori.
The N18 billion spent on debt service is a significant portion of the state's budget, and it has sparked worries about the impact on the state's development projects and social services.
The audit report states that the state paid a total sum of N18,314,549,831.73 as a public debt charge while recording only N13,193,310,456.35 tagged as ‘non-tax revenue’ last year. The N18 billion charge was incurred as a result of a long-term loan agreement to which the state had agreed as early as 2016.
The report reads: “There was no significant change in the accounting policy during the year. The State is giving further disclosure in respect of:
“i.a. The Intangile Asset shown in the Asset in the financial positions during the year is the corresponding figure of the introduction of Long Term Liabilities into the Statement of Asset and Liabilities from the period covering 2001 to 2016 in Aggregate of N128,102,896,670.89, This Represented the Long-term loan Figures of N128,102,896,670.89. The State is writing this figure off over the next ten years base on GAAP Standards.
“The Write Off have started in 2017 Accounting year and this will end in year 2026. This figure is shown in the 2016 to 2022 Audited Financial Statement (statement of Asset & Liabilities). i.b. Additions to Intangible Asset (from year 2018 to 2022) are expenditures treated as Research and development, software acquisition and the various State Agricultural Development programmes as well as other capital expenditures not budgeted for as Property, Plant and Equipment (PPEs) and have been included in the financial statements as intangible assets shown in the note to the financial statement number 34.
“ii. Introduction of Liability to Central Bank of Nigeria on the two Billion naira Micro credit to Delta State Government through-Micro, Small and Medium Ent which repayment is yet to commence and an accrued interest of N160,000,000.00 have been capitalized in previous year. However, N14 Million on the accrued interest have been paid to CBN during the year 2023.
“iii. The significant error on the Contractors' arrears and MDAs for the year ended 31st December 2021 have been corrected during the year and is treated as prior year adjustment in note number 31 for Property, plant and Equipment schedules.”
The state was governed from January to May 2023 by Ifeanyi Okowa before he was succeeded by the incumbent governor, Sheriff Oborevwori.
The N18 billion spent on debt service is a significant portion of the state's budget, and it has sparked worries about the impact on the state's development projects and social services.
The audit report states that the state paid a total sum of N18,314,549,831.73 as a public debt charge while recording only N13,193,310,456.35 tagged as ‘non-tax revenue’ last year. The N18 billion charge was incurred as a result of a long-term loan agreement to which the state had agreed as early as 2016.
The report reads: “There was no significant change in the accounting policy during the year. The State is giving further disclosure in respect of:
“i.a. The Intangile Asset shown in the Asset in the financial positions during the year is the corresponding figure of the introduction of Long Term Liabilities into the Statement of Asset and Liabilities from the period covering 2001 to 2016 in Aggregate of N128,102,896,670.89, This Represented the Long-term loan Figures of N128,102,896,670.89. The State is writing this figure off over the next ten years base on GAAP Standards.
“The Write Off have started in 2017 Accounting year and this will end in year 2026. This figure is shown in the 2016 to 2022 Audited Financial Statement (statement of Asset & Liabilities). i.b. Additions to Intangible Asset (from year 2018 to 2022) are expenditures treated as Research and development, software acquisition and the various State Agricultural Development programmes as well as other capital expenditures not budgeted for as Property, Plant and Equipment (PPEs) and have been included in the financial statements as intangible assets shown in the note to the financial statement number 34.
“ii. Introduction of Liability to Central Bank of Nigeria on the two Billion naira Micro credit to Delta State Government through-Micro, Small and Medium Ent which repayment is yet to commence and an accrued interest of N160,000,000.00 have been capitalized in previous year. However, N14 Million on the accrued interest have been paid to CBN during the year 2023.
“iii. The significant error on the Contractors' arrears and MDAs for the year ended 31st December 2021 have been corrected during the year and is treated as prior year adjustment in note number 31 for Property, plant and Equipment schedules.”
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