Rating Release
Agusto & Co. assigns a ‘Bbb’ rating to the Jigawa State Government, with a stable outlook
The rating expires on 31 December 2025.
Agusto & Co. hereby assigns a “Bbb” rating to the Jigawa State Government (“Jigawa State”, “JGSG” or “the State”). The rating reflects Jigawa State’s increasing value-added tax (VAT) receipts and centrally collected revenue amid the recovery in Nigeria’s hydrocarbon production output and the positive effect of the currency devaluation on oil revenues. The State’s rating is also strengthened by a relatively balanced expenditure profile, mainly driven by ongoing infrastructure investments (evidenced by a healthy five-year average capital expenditure to total revenue ratio of 37%) to engender a favourable operating environment for households and businesses, thereby supporting future internally generated revenue (IGR) growth. The assigned rating also considers JGSG’s stable political environment marked by a cooperative relationship among the three tiers of government, acceptable expenditure profile and the State’s historically low borrowing levels and interest costs, which continue to support its financial flexibility. Nevertheless, the rating is significantly constrained by Jigawa State’s lower IGR levels (evidenced by a three-year IGR to total revenue ratio of 14%), compared to states with similar revenue profiles and the sensitivity of its non-debt recurrent expenditure to macroeconomic headwinds.
Jigawa State is an inland state in Northeast Nigeria. JGSG, which was carved out from Kano State, has a total land area of about 22,410 square kilometres, making it the 18th largest state in Nigeria. Jigawa has good arable land that supports large-scale farming (particularly millet, sorghum, cowpea and groundnuts, as well as cash crops like sesame, rice and wheat). The State also has significant deposits of solid minerals in commercial quantities – granite, kaolin, limestone, quartz, tin and columbite.
