Nigerian state governments have collectively borrowed approximately N46.17 billion ($109.6 million) from Access Bank, Fidelity Bank, and Zenith Bank within the first six months of 2023 to cover their salary obligations. These revelations are based on an analysis of the half-year 2023 financial statements of these banks.
The breakdown of this borrowing is as follows:
- Access Bank recorded the highest amount borrowed by states during the six-month period, totaling N42.97 billion.
- Zenith Bank followed with N1.78 billion.
- Fidelity Bank provided N1.42 billion.
According to the H1 2023 financial statement of Access Bank, the outstanding balance on the salary bailout fund stood at N58.84 billion by June 30, 2023, down from N101.81 billion in December 2022.
Fidelity Bank’s H1 2023 financial statement showed that the outstanding balance on the salary bailout fund was N80.65 billion by June 30, 2023, compared to N82.07 billion in December 2022.
Zenith Bank’s H1 2023 financial statement indicated an outstanding balance on the salary bailout fund of N125.14 billion by June 30, 2023, down from N126.92 billion in December 2022.
These loans were extended as part of a salary bailout scheme to assist states in meeting their salary obligations to workers.
The consistent need for states to borrow to meet recurrent expenditure obligations, particularly salaries, raises concerns about their financial stability and their capacity to manage finances effectively. Economists emphasize the importance of increasing internally generated revenue and financial discipline at the state level as alternatives to borrowing for recurrent expenditures.