In the middle of the current economic crisis, the 28 governors of states who are leaving office on May 29 or running for reelection, as well as the minister of the Federal Capital Territory, have racked up around N5.8 trillion in subnational debt.
The Debt Management Office looked at sub-national debt data to come up with the debt estimates.
According to The Punch, 11 governors out of the 28 states will run for reelection in March.
They include the governors of Gombe, Babagana Zulum, Borno, Abdullahi Sule, Seyi Makinde, Seyi Makinde, Oyo, Mai Buni, Yobe, Bello Matawalle, Zamfara, Babajide Sanwo-Olu, Lagos, Ahmadu Fintiri, Ogun, Dapo Abiodun, Bauchi, and Kwara state’s Abdulrahman Abdulrazak.
Emannuel Udom of Akwa Ibom, Samuel Ortom of Benue, Ifeanyi Okowa of Delta, David Umahi of Ebonyi, Mohammed Abubakar of Gome, Aminu Masari of Katsina, Bello Bagudu of Kebbi, Abubakar Bello of Niger, Aminu Tambuwal of Sokoto, Simon Lalong of the Plateau, and Darius Ishaku of Taraba
Other governors who are not running for re-election include Nasiru El-rufai, the governor of Kaduna State; Abdulahi Ganduje, the governors of Kano, Abia, Ifeanyi Ugwuanyi, Cross Rivers, and Rivers.
There are two types of sub-national debts: loans from local creditors and obligations to foreign or international creditors like the World Bank.
On the DMO website, domestic and foreign debts as of September 30 and June 30 of 2022, respectively, were listed.
According to the reports, sub-national domestic debts were approximately N4.38 trillion, while their external obligations were approximately $3.15 billion, or N1.42 trillion, based on the Central Bank of Nigeria’s exchange rate of N449.53 to a dollar as of Thursday.
Lagos has the greatest debt, with N877.04 billion in domestic debt and $1.27 billion in foreign debt, according to the data.
Kaduna, which has $586.78 million in external debt and N86.86 billion in internal debt, is the next in line.
Rivers has the third-highest debt, with a domestic debt of N225.51 billion and a foreign debt of $140.18 million.
Cross Rivers, with N175.2 billion in domestic debt and $215.75 million in foreign debt, is the fourth-highest debtor in the world.
With N241.78 billion in domestic debt and $122.73 million in foreign debt, Ogun comes in second.
Others are Bauchi (N144.28 billion in internal debt and $172.76 billion in external debt), Enugu (N89.89 billion and $123.02 billion), Kano (N125.19 billion and $109.42 billion), Abia (N104.57 billion and $95.63 billion), and Adamawa (N122.48 billion and $77.01 billion).
A few other states that owe money include Akwa Ibom (N219.62 billion and $46.567 million), Benue (N143.37 billion and $30.47 million), Borno (N96.33 billion and $18.7 million), Delta (N272.61 billion and $60.05 billion), Ebonyi (N67.06 billion and $59.84 billion), Gombe (N139.1 billion and $46.93 billion), Jigawa (N44.41 billion and
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On the list are the following: Niger (N98.26bn and $69.27m), Oyo (N160.07bn and $76.97m), Plateau (N151.90bn and $33.74m), Sokoto (N85.58bn and $37.13m), Taraba (N90.81bn and $22.28m), Yobe (N92.86bn and $23.09m), and Zamfara (N109.69bn and $23.09m)
Domestic debt in the FCT was N112.49 billion, and external debt was N25.38 million.
According to The PUNCH, these states and the FCT were responsible for up to 81.72 percent of the N5.36 trillion in subnational domestic debt and 69.08 percent of the $4.56 billion in external debt.
The Director, Portfolio Management Department, of the DMO, Dele Afolabi, mentioned that each state was supposed to turn in quarterly statistics on their domestic debts during a phone conversation with our correspondent on Thursday.
He continued by saying that states would have better access to finance if they were open about their debt profiles.
The PUNCH noted that although the federal government is responsible for debt servicing, it is taken from the money given to the states by the federal government.
Government debt
The World Bank stated in its December 2022 issue of the Nigeria Development Update that state indebtedness will exceed 200% of the income earned in 2022 and 2023.
The debt levels for an average state were predicted to rise from 154.6% of revenues in 2021 to more than 200% of revenues in 2022 and 2023, according to the analysis.
The Washington-based bank claims that the decrease in funding from the Federation Account will be the cause of the increase in debt, which would probably worsen the states’ budgetary situation.
“The fiscal health of sub-national governments is likely to deteriorate in 2022,” the research continued, “as Federation Account transfers for the average state are estimated to drop due to insufficient net oil income collection.”
“For an average state, statutory transfers—the primary source of state revenue—are projected to fall by 5.5%, while internally produced revenue is projected to mostly hold steady at 2021 levels (declining slightly by 0.8 percent).
Nevertheless, increases in VAT collections are anticipated to somewhat balance decreases in statutory transfers, causing an average state’s overall revenues to remain roughly flat in nominal terms. However, the average state’s spending is projected to rise by roughly 4% in nominal terms, with capital spending forecast to rise by 17.3% in the years leading up to the 2023 general election.
PUNCH
