Dear Subscriber,

The FG described five (Katsina, Bayelsa, Taraba and Borno) of the 36 states as insolvent. The criteria for this classification include but are not limited to anaemic or low internally generated revenue. All five states have an average unemployment and inflation rate of 25.36% and 12.56% respectively. Interestingly, Bayelsa is an oil producing state.

At a time of negative growth and high unemployment, state government insolvency is the worst possible outcome when the government stimulus package needs funding.

On a positive note, oil prices are above $44pb despite the weak global oil demand outlook.

The slides in the download provide a snapshot of the discussion in the Commodities segment of the Business Morning programme on Channels TV by the Head of the FDC Think Tank.

Enjoy your read!