President-elect Muhammadu Buhari and the
governors that will assume office for the first
time on May 29 will have huge debt burdens to
bear, records of the Debt Management Office
(DMO) has revealed.
According to the DMO, the Federal Government
has an external debt stock of $6.445 billion and
another N7.9 trillion domestic debt totalling
N9.19 trillion, as of December 31, 2014. The
debts are currently being serviced with N700
billion every year.
Nigeria’s most indebted states
DMO’s external debt figures (without adding
domestic debts) show Lagos as Nigeria’s most
indebted state with $1.17 billion debt. It is
distantly followed by Kaduna with $234 million
debt, Cross River ($142 million), Edo ($123
million), Ogun ($109 million), Bauchi ($88
million), Katsina ($79 milllion), Osun ($74
million), Oyo ($72 million) and Enugu ($69
million).
Least indebted states
The states that are least indebted are:
Taraba (N4.56 bn), Borno (N4.61 bn), Delta
(N4.85 bn), Plateau (N6.19 bn), Yobe (N6.25
bn), Benue (N6.62 bn), Abia (N6.76 bn),
Zamfara (N7.11 bn) and Kogi (N7.16 bn).
While most of the highly indebted state have
accumulated debts through issuance of bonds,
Abia State has been very cautious about doing
this, hence its position as one of the least
indebted states.
World Bank Consultant and Abia State Finance
Commissioner, Dr Phillip Nto, explaining the
state’s reason for applying caution when it
comes to accumulating debt, to Vanguard, said
Abia State is mindful of the future of Abians.
“Ordinarily when you collect bond, you are
mortgaging your future because you pay over
a long period of time but our governor is one
that feels that it is not proper to mortgage the
future of the state. Abia State is trying to come
out from the mess, the monumental difficulty
which it was pushed into in early 2000, so for
the state to be mortgaged again means that the
state will be declared insolvent.
“It is the reason the governor (Theodore Orji)
is not enthusiastic about going to the bond
market. But what some other states are
achieving with their bond money, Governor T.A.
Orji is also achieving with the amount he gets
from the federation account and the IGR,” said
Nto.
Osun State is one of Nigeria’s poorest states,
but it ranked 9thh in the list of the most
indebted states in the country. One of its debt-
accumulating activities was the N11.4 billion
sukuk which made headlines in 2013. Some
indigenes of the state have, however, argued
that the Islamic bond like several other debts,
have not translated to development in the
state, with several projects abandoned and
workers’ salaries left unpaid for months.
The federal government has also expressed
concern over the rate at which states are
borrowing. Last year, the FG directed Deposit
Money Banks not to grant fresh loans to state
governments unless they got approval and
clearance from the Federal Ministry of Finance.
The Minister of State for Finance, Bashir
Yuguda, said the decision is not aimed at
stalling the development efforts of the state
governments, as alleged, but to protect the
states from excessive accumulation of debts.
“The domestic debt profile of some states is
scary. The states are so much in debt that only
a small amount of their allocations get to them
at the end of the day because most times
money for debt servicing is removed from
source,” he said while addressing participants
in Course 23 for security agents at the National
War College, Abuja.
Yuguda said most of the states have been
experiencing difficulties in servicing their
existing debts and it would not be advisable to
allow them take fresh loans. Rather, he
stressed the need for the states to continue to
look inwards for other sources of revenue to
pursue their development programme.

All na CHANGE abi?

Apc... CHANGE

Dem don eat the money finish, come remain CHANGE for their brainwashed people. Haha! APC Change!

Well waiting for the domestic debt profiling. Akwa Ibom most double Kaduna.

Is it a coincidence that virtually all SW states are in debt?

Disappointed in my state; Cross State.

Anambra is one hell of a state I respect when it comes fiscal discipline.

I give kudos to Delta state for being among the least depted state. also how did cross river come to be owing such dept wen they have no development plan like akwa ibom?