Central Bank of Nigeria (CBN) building | File Image
Debts increased by 73.46 per cent, from N4.15 trillion to N7.2 trillion, following the devaluation of the naira from N899.39/$1 in December 2023 to N1,470.19/$1 by June 2024
By Valentine Amanze
The debt profile of Nigeria’s 36 states has hit N11.47 trillion as of June 30, 2024, despite allocations by the Federal Accounts Allocation Committee (FAAC), and their respective internally generated revenues (IGR).
Debt Management Office (DMO), which disclosed this in a statement, explained that the rise was 14.57 per cent higher than the N10.01 trillion recorded in December 2023.
It further disclosed that the external debt for the states and the Federal Capital Territory also climbed from $4.61 billion to $4.89 billion within the period under review.
In naira terms, it said that the debts increased by 73.46 per cent, from N4.15 trillion to N7.2 trillion, following the devaluation of the naira from N899.39/$1 in December 2023 to N1,470.19/$1 by June 2024.
Besides, domestic debt for states and the FCT declined from N5.86 trillion to N4.27 trillion.
In total, states and the FCT accounted for Nigeria’s public debt of N134.3 trillion in June 2024, a decrease from their 10.29 per cent share in December 2023, even as their nominal debt levels increased.
Also, states debts surged by 38% to N10.01 trillion in one year.
Meanwhile, Channels Television had reported that the sub-national governments continued to grapple with a persistent reliance on borrowing to finance their budgets in 2023, as the total debt stock of the 36 states surged by 38.1%, from N7.25 trillion in 2022 to N10.01tn.
According to BudgIT’s 2024 State of States report released on Tuesday, the debt growth was partly driven by a N606.12 billion increase in domestic debt, resulting in an average year-on-year growth rate of 11.4%. By December 31, 2023, the total domestic debt stood at N5.86 trillion.
The situation was further complicated by rising foreign debt, which increased by 4.1%, from $4.43 billion in 2022 to $4.61 billion in 2023.
According to the report, the liberalisation of the exchange rate exacerbated the financial strain on states, significantly raising their foreign loan repayment obligations in naira terms.
Lagos State remained the most indebted in foreign currency, accounting for 26.9% of the total foreign debt, equivalent to $1.24bn.
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