The domestic debt of Nigeria’s 36 states and the Federal Capital Territory (FCT) increased by N198.96 billion within three months.
This is according to the latest subnational debt report from the Debt Management Office (DMO).
The total domestic debt of states and the FCT rose by 5% from N4.07 trillion in March 2024 to N4.27 trillion by June 2024.
Nairametrics observed variations in debt levels across the states, with some recording significant increases while others showed marginal changes or reductions.
Rivers, Taraba, Niger record sharp debt increases
Rivers State recorded the highest percentage increase in debt during the period under review. The state’s debt rose by 67%, jumping from N232.58 billion in March to N389.20 billion in June, an increase of N156.62 billion.
- Similarly, Taraba State’s debt surged by 160%, rising from N32.64 billion to N84.72 billion, a difference of N52.08 billion.
- Niger State followed with a 70% increase, adding N60.22 billion to its March debt stock of N86.07 billion, bringing its total to N146.29 billion by the end of June.
These sharp increases highlight a significant reliance on borrowing to finance government projects and other commitments, raising concerns about the sustainability of such debt levels.
Lagos retains top spot despite reduction
Lagos State, which continues to carry the highest debt burden among the states, saw a 5% decline in its debt stock.
- The state reduced its domestic debt from N929.41 billion in March to N885.99 billion in June, reflecting a decrease of N43.42 billion.
- States such as Benue, Kwara, and Nasarawa recorded little to no significant changes in their debt profiles. Benue’s debt stock saw a negligible increase of N144.24 million, while Kwara’s dropped slightly by N23.12 million. Nasarawa recorded a marginal decline of 187.64 million during the same period.
In contrast, Delta State achieved one of the largest reductions in debt stock, decreasing its domestic debt by N30.36 billion, representing a 9% drop from N334.90 billion in March to N304.54 billion in June. Bayelsa and Ebonyi states also managed to reduce their debts by 6% and 9%, respectively.
What you should know
Nairametrics earlier exclusively reported that Nigeria’s public debt stock surged to N134.3 trillion ($91.3 billion) by the end of the second quarter of 2024. This was an increase of 10.35% from the N121.7 trillion ($91.5 billion) recorded in the first quarter and announced by the Debt Management Office (DMO).
- Notably, while the total debt grew in naira terms, the dollar equivalent of the debt remained relatively stable, underlining the impact of currency movements on debt valuation.
- Nigeria’s domestic and external debt portfolios reveal strategic borrowing trends, with domestic debt continuing to dominate the public debt landscape in Q2 2024.
Domestic debt accounted for 53% of the total, amounting to N71.2 trillion ($48.4 billion), while external debt made up 47%, equivalent to N63.1 trillion ($42.9 billion).
