Sixteen states of the federation have raised bonds totalling N520 billion in the last six years without clear outlines on how the funds were used, THISDAY investigation has revealed.
This is against the backdrop of massive unemployment and infrastructural deficit across the country, which the debts could have addressed.
Specifically, the 16 state governments were found to have raised the bonds without their citizens' understanding of what the funds are meant for.
Filings by the state governments at the
Analysis of numbers obtained by THISDAY showed that Osun state with internal generated revenue and federal allocation of less than N2 billion has so far raised N30 billion including the just concluded N11.4 billion sukuk.
Others include: Kwara N17 billion,
Benue, Ebonyi state
THISDAY investigation also revealed that Oyo, Ekiti, Zamfara, Rivers and Adamawa states respectively have concluded arrangements to head to the stock market to have a taste of the binge.
THISDAY findings also revealed that the states activities at the bond market have crowded out corporates, particularly the manufacturing sector thus inhibiting their ability to create value and employment.p
Although safety of the funds is paramount, experts believe that pension funds administrators (PFAs) should do more than rely mainly on state and federal government bonds to invest pension contributions.
The PFAs held bonds totalling N1.9 trillion at the end of March, equivalent to 45 per cent of their assets under management and 42 per cent of the outstanding stock of debt instruments.
The federal government however hold a commanding control of debt issuance in the capital market.
THSDAY exclusively reported last week that the Debt Management Office (DMO) received a total of N4.2 trillion bids for FGN bonds in five years.
The DMO held its sixth monthly auction of FGN bonds of the year last week, and has an unchanged target of raising N70 billion (
Data from DMO show that domestic issuance for the year is well advanced with the raising of N385 billion (gross) from the sale of FGN bonds in the first five months.
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