…as Local Currency Debt drops 48%
The Enugu State Governor, Dr. Peter Mbah has engineered a turn around in the finances of the State as Internal Generated Revenue (IGR) surges and domestic naira debts fall.
The states IGR increased by 54.6% to N180.5 billion in 2024 driven by more efficient collections and sales of landed properties, according to ratings data seen by MoneyCentral.
Federal transfers also grew around 20% to NGN150 billion supported by higher VAT receipts and increased monthly FAAC allocations
As a result, the operating surplus rose to a record high of N247 billion in 2024 versus N45.6 billion in 2023, supporting higher capital spending of N207 billion, compared to N67 billion in 2023.
Meanwhile the state’s leverage has improved on the back of a reduction in domestic debt and increase in the Enugu State Internal Revenue.
Although, reported gross debt increased to N162.7 billion in 2024, compared to N144.3 billion in 2023, this was primarily a result of Naira depreciation in USD loans.
In 2024, Enugu State benefited from a debt swap arrangement with loans owed to FGN set off against outstanding receivables from FGN, reducing local currency debt by around 48%.
Overall, net debt to recurrent income improved to 34% in 2024 (2023: 70%), operating cash flow (OCF) coverage of gross debt strengthened to 145% (2023: 28.2%) and OCF coverage of net interest strengthened to 21x in 2024 (2023: 9x).
Cash holdings remain sizable at N49 billion as of 31 December 2024 and the state forecasts it will further reduce debt through repayments of N10 billion in 2025.
The Federal House of Representatives Committee on Reformatory Institutions recently described the Enugu State Governor, Dr Peter Mbah as the pride of the South East and an epitome of good governance.
Enugu State’s business profile is supported by its good socio-economic indicators and notable contribution to the national GDP.
The State is a major commercial hub in southeastern Nigeria, and benefits from a growing industrial base and a robust public service sector.
Furthermore, Enugu is endowed with coal and other solid mineral resources.
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