Boss98.9 FM
The Debt Management Office on Monday reports that Nigeria’s 36 states saw a rise in total debts, reaching N11.47 trillion by June 2024 as this reflects a 14.57% increase from N10.01 trillion in December 2023, despite federal allocations and internally generated revenues.
External debt for states and the Federal Capital Territory grew from $4.61 billion to $4.89 billion, with naira-denominated debt surging 73.46% due to the devaluation of the naira. However, domestic debt for states and the FCT declined from N5.86 trillion to N4.27 trillion.
By mid-2024, states and the FCT accounted for a notable share of Nigeria’s N134.3 trillion public debt as reports suggest that heavy borrowing continued in 2023, as total state debt surged 38.1% from N7.25 trillion in 2022.
A BudgIT report highlights an 11.4% average annual growth rate in domestic debt and the strain of foreign loan repayments due to the exchange rate liberalisation as Lagos State led in foreign debt, holding 26.9% of the total.
The report points to the states’ heavy reliance on Federal Accounts Allocation Committee funds while in 2023, 32 states sourced over half of their revenue from FAAC, with 14 states depending on it for 70% or more as this reliance, especially on oil revenue, exposes states to economic shocks.
Lagos State was also noted for contributing N1.24 trillion, or 14.32%, to the 36 states’ combined revenue of N8.66 trillion in 2023, driven largely by increased FAAC contributions as the findings underscore the need for states to boost internally generated revenue to ensure fiscal sustainability.
