BAUCHI, Nigeria – The recent audit report has brought to light that by the end of 2020, the Bauchi State Government was indebted to its retirees to N20.7 billion in gratuities.
As outlined in the 2020 auditor general’s report, this debt is part of the significant challenges the Bauchi State Government is grappling with, especially in the face of economic turbulence ignited by federal policies including subsidy removal and loosened foreign exchange controls.
Analysts reviewing the report voiced their concerns, pointing out, “Such an enormous debt towards retired civil and public servants is a blatant betrayal. If retirees are saddled with this level of financial burden, it not only pushes them into abysmal poverty but also acts as a deterrent for the current employees, fostering a sense of distrust and lack of motivation.”
Babatunde Kolawole, a finance and audit specialist and partner at HLB Z.O. Ososanya and Co, on Monday, August 14, 2023, emphasized the urgency of the situation, suggesting, “A phased repayment strategy should be promptly developed and executed to settle this debt in the near to medium term.”
Further analysis of the audit report highlighted the state’s weak financial standing with an alarmingly low Internally Generated Revenue, IGR, at a mere 13% of its total revenue.
The state generated only N13,039,294,812.42 as IGR out of the total N76,483,947,820.98 it garnered in 2020.
A finance expert noted, “Such low IGR figures clearly indicate the state’s inability to drive capital development. There is an urgent need to bolster the IGR, targeting a contribution of at least 50% to the state’s total revenue. This can be achieved by tapping into multiple tax avenues.”
The state’s borrowing habits also raised eyebrows. Bauchi State has accumulated external debts of N51.2 billion and domestic borrowings amounting to N68.5 billion.
A concerned chartered accountant pointed out, “Securing loans without a clear capital project agenda and instead utilizing them for regular governmental functions is a straight path to insolvency.”
Several inconsistencies and irregularities were observed in the records of the State’s Ministries, Departments, and Agencies, including unexecuted work contracts, unaddressed audit queries, missing inventory items, and lack of transparency in contract payments.
However, the audit workshop praised Bauchi State for maintaining relatively updated audit documentation, a step ahead of the Federal Government, which last produced an audit in 2019.
Financial experts graced the workshop like past ICAN president, Mallam Zakari Muhammed, Mr Babatunde Kolawole, Mr Yusuf Doma, and educationist-accountant Mrs Umeshie Anikwe.
