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How Lagos, Edo, Kaduna amassed highest foreign debt profiles

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The Debt Management Office (DMO) on Wednesday revealed that of the 36 states in Nigeria, Lagos, Kaduna, Edo had accumulated 50.5 per cent of the total foreign debts as at June 30, 2016.

The DMO said of the $3.65bn debts recorded against the 36 states and Federal Capital Territory, Abuja, $1.84bn were owed by the three states, even as the federal government’s debt stood at $7.61bn.

While questions are being raised as to what the monies were used for, state officials have been frantic to offer explanations, though unofficially.

Confirming Lagos’ debt profile, a senior official in the state’s ministry of Finance said, the debt rose to such magnitude because Lagos, as the commercial hub of Nigeria has been aggressively chasing rapid development to position it to meet that status.

“There is hardly any state in the country that can be compared to us in terms of measures that have seen Lagos in the position it occupies today, in terms of its huge population growth and its effect on infrastructural facilities in it,” the official stated.

Though he failed to say the exact foreign debt the state owes, he did not deny that the state owes such debts, adding that in the past 10 years, there have been persistent pursuit of development projects that will pass the test of time.

Officials claimed most of the loans Lagos were deployed in its joint venture agreements with firms from China, the United States and Germany, and were part of the execution of the ultra-modern multi-purpose expressway, running through Lagos to Benin Republic.

Other projects, they stated, include reviving the moribund water transport system and the Lekki-Epe Expressway, originally meant to be build-operate-and-transfer, which the official said was stalled due to political pressure on the state government to discontinue the phase of the second toll gate.

Read also: Nigeria’s economy will grow when policy makers become focused –Sanusi

On his part, a senior official of the Edo state civil service also offered explanations on why the state has such huge debt profile, but fell short of admitting that it has not overly reflected on the fortunes of the state.

He stated that the government had also tried to invest in infrastructural development, which he admitted may not have been commensurate with the amounts borrowed, adding that some of the funds were channeled into other things, but failed to go into details.

Lagos blazed the trail of debtor states with $1.43bn, or 39.17 per cent of the country’s total sub-national foreign debts.

It is followed by Kaduna State, with total foreign debt of $225.28m, or 6.16 per cent of the debts, while Edo State has a total of $179.52m, being 4.91 per cent of the sun-national debt in foreign debts.

Further breakdowns indicate that other states’ foreign debts include Cross River, $141.47m or 3.87 per cent; and Ogun, $103.55m or 2.83 per cent.

Bauchi owes $97.23m or 2.66 per cent; Osun, $78.93m or 2.16 per cent; Adamawa, $77.14m or 2.11 per cent; Enugu, $74.46m or 2.04 per cent; Katsina, $68.99m or 1.89 per cent; and Oyo, $67.56m or 1.85 per cent.

Some of the least indebted states of the federation are Borno, $21.89m; Taraba, $23.01m; Plateau, $29.24m; Yobe, $29.28m; Jigawa, $32.62m; Kogi, $33.56m; Benue, $34.26; FCT, $34.8m; Zamfara, $35.07m; and Delta, $42.21m.

Mr. Godwin Ezohemekh, a financial expert and former banker, said most of the states owed more than has been disclosed by DMO, adding that when the local debt profiles are fully revealed, it will be worse than is being stated.

He said the idea of disclosing public foreign debts without following it up with the local debts, which are in bonds, treasury bills and unsettled bill of contracts tends to emphasis foreign debts as more important in the attempt to have a clearer picture of the state of t economy.

By Emma Eke….

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