The latest data from the Debt Management Office (DMO) shows that external debt for the states and the Federal Capital Territory climbed from $4.61 billion to $4.89 billion, reflecting a 6.14% increase between December 2023 and June 2024.
However, in naira terms, this figure surged by a staggering 73.46%, 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.
The DMO data highlights a growing reliance on external borrowing among Nigerian states, driven by the need to fund large-scale infrastructure projects and critical services.
While borrowing can spur development, it also raises concerns about debt sustainability, especially amid Nigeria’s broader fiscal challenges.
Below are the top 10 most indebted Nigerian states to foreign creditors as of June 30, 2024:
10. Katsina
Katsina saw a significant increase in foreign debt, surging by 125% from $50.31 million in December 2023 to $112.98 million by June 2024.
This growth of $62.67 million could be attributed to new borrowing to fund critical development projects in agriculture and rural infrastructure, which are pivotal to the predominantly agrarian economy of the state.
9. Kano
Kano, a key economic hub in northern Nigeria, reported a 14% rise in foreign debt, climbing from $107.92 million in December 2023 to $123.39 million in June 2024.
The $15.47 million increase may reflect Kano’s plan to expand industrial parks and improve trade infrastructure to boost its commercial activities.
8. Ekiti
Ekiti’s foreign debt rose by 13%, from $121.05 million to $136.64 million, representing an increase of $15.59 million. This surge is likely tied to the state’s ongoing efforts to enhance education and healthcare systems.
7. Ogun
Ogun’s foreign debt slightly decreased by 1% from $168.83 million in December 2023 to $166.64 million in June 2024, marking a reduction of $2.20 million.
This indicates improved debt management by the state, which is likely leveraging its position as an industrial hub to attract more internal revenue and reduce external borrowing.
6. Bauchi
Similarly, Bauchi recorded a 1% decline in its foreign debt, falling from $187.63 million to $185.28 million within the same period, a marginal reduction of $2.36 million.
Known for its agricultural potential, the state appears to be adopting conservative fiscal strategies to manage its borrowing levels.
5. Rivers
Rivers State posted the highest nominal increase in foreign debt, which rose by a staggering 152%, from $80.94 million in December 2023 to $203.81 million in June 2024.
The $122.86 million increase reflects the state’s significant reliance on foreign debt.
4. Cross River
Cross River’s foreign debt remained stable at $211 million over the six-month period. This unchanged figure reflects a cautious approach to borrowing as the state focuses on maintaining fiscal sustainability while pursuing key tourism and infrastructural projects.
3. Edo
Edo State witnessed a notable 21% increase in foreign debt, which rose from $314.45 million to $380.97 million, marking a $66.52 million jump.
This increase highlights Edo’s continued reliance on external debt to drive infrastructure development and economic growth.
2. Kaduna
Kaduna recorded a 9% increase in its foreign debt, climbing from $587.07 million to $640.99 million, a rise of $53.92 million.
1. Lagos
Lagos State, Nigeria’s commercial powerhouse, leads the pack with the highest foreign debt of $1.201 billion as of June 2024.
- However, this represents a 3% decline from $1.244 billion in December 2023, marking a reduction of $42.80 million. Lagos’ massive foreign debt is reflective of its aggressive infrastructural investments, including road construction and public transportation systems.
- The slight reduction could indicate strategic repayments to manage its debt profile.