RipplesMetrics: States pile up debt as oil money dries up, investors stay away

States are going through a difficult period. Forget the politics of attempting to get power, being at the helm of affairs is more difficult; that is, if people and progress are priorities.

Not only is the monthly Federation Allocation diminishing, oil money from the NNPC is also not flowing in. States are finding it increasingly difficult to attract investments, making more debts an increasing viable option for funds.

In a statement on Friday, Cross River State Government called the survival of the state as a miracle.

The state decried the paltry N34m federal allocation for March 2022 and also a N2,187,674,707.27 deduction to service debts.

Similarly, Kwara State Government Ministry of Finance also revealed local government councils were forced to source for extra funds to pay full monthly salary to their workers in February and also March. This development means Nigeria’s debt stock at subnational level is about to get worst.

On Monday, the Debt Management Office (DMO) revealed that as at the end of 2021, thirty-three Nigerian states including the Federal Capital Territory owed N4.45 trillion domestic debt and $4.77 billion external debt.

This is an increase from N4.19 trillion domestic debt and N4.61 billion external debt, indicating that states in the 12 months of 2021 borrowed N268 billion from banks, and investors within Nigeria and $158.5 million from foreign creditors.

Read also: RipplesMetrics: Nigeria’s oil revenue no longer enough to pay off debts; could take 39 years for full repayment

This is as only 11 states attracted investors money to their states data from the latest capital importation report shows.

In fact, among the states that attracted investment, Lagos alone accounted for 86.9% of the $6.7 billion.

Ranking Nigerian states by domestic debts

Lagos came first followed by Ogun, Rivers, Akwa Ibom, Imo and Cross-river. The six states accounts for 38.05% of the total states domestic debts.

Lagos alone owes N658.95 billion followed by N232.62 billion domestic debt stock of Ogun states.

Rivers, Akwa Ibom, Imo and Cross-river all have debts of N225.50 billion, N214.60 billion and N205.18 billion respectively.

Ranking Nigerian states by external debt

As mentioned earlier, states total external debt is at $4.1 billion borrowed from World Bank, China Exim Bank, Japan, India, Germany, among others.

For the top five states, Lagos again led followed by Kaduna, Cross River, Edo, Rivers and Bauchi.

The five states account for more than half(57.99%) of the total external debts.

Breakdown

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