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Lagos, Delta, River, Akwa- Ibom and Osun State are among other states listed most indebted states of the federation in full year 2017 with a combined domestic debts profile of $1.03 billion.
According to Nigeria Bureau of Statistics (NBS), the total foreign and domestic debts in full year 2017 stood at $18.9bn and N3.35trn respectively for the 36 states of the federation including the Federal Capital Territory as at 31st December 2017.
Total state domestic debt stood at N3.35 trillion as Lagos state has the highest domestic debt profile among the thirty-six states and the FCT accounting for 10.85 per cent of the total domestic debt stock with N363 billion; followed by Delta state, who had a domestic debt of N228 billion while River state had a debt stock of N119 billion to complete the top three states with the highest domestic debts in full year 2017.
Also, Akwa Ibom and Osun had a domestic debts stock of N187 billion and N138 billion respectively, while Anambra state has the least debt in this category with N2.6 billion.
Total Federal Government debt accounted for 78.23 percent of Nigeria’s total foreign debt while all States and the Federal Capital Territory (FCT) accounted for the remaining 21.77 percent.
Further investigation of Nigeria’s foreign debt showed that $10.24bn of the debt was multilateral; $274.98m was bilateral (AFD) and $2.09bn from the Exim Bank of China credited to the Federal Government while $6.30bn was commercial.
In external debts; Lagos, the nation’s commercial hub retained its topmost position as the most indebted state of the federation with a total of N1.4 billion accounting for 35.61 per cent of total foreign debts while Kaduna had 5.79 per cent with external debts of N238 million, Edo state had 5.64 per cent with external debts of N232 million, Cross River had 4.08 per cent with external debts of N167 million and Enugu had 3.23 per cent with external debts of N133 million followed closely.
There are growing concerns over the debt sustainability of states in Nigeria as a report by the Fiscal Responsibility Commission has shown that most of them as at the end of 2016 were owing debts well in excess of 50 per cent of their annual revenues.
States in the South-west are the most affected as five of the six states in the geo-political zone are among the top seven states with worrisome debt to revenue ratio.
According to the report, Lagos, Osun and Cross River states have debts over 480 per cent of their gross revenues, while those of 18 states exceed their revenues by more than 200 per cent.
The revelations are contained in the 2016 annual report of the Fiscal Responsibility Commission, obtained by the Abuja-based Economic Confidential.
The report revealed that the trend was contrary to the guidelines set by the Debt Management Office on debt sustainability which states that the debt of a state should not exceed 50 per cent of the state’s statutory revenue in the previous 12 months.
“In the light of the DMO’s guidelines on the Debt Management Framework, specifically, sections 222 to 273 of the Investment and Securities Act, 2007 pertaining to debt sustainability, according to the guidelines, the debt to income ratio of states should not exceed 50 per cent of the statutory revenue for the preceding 12 months,” the report said.
DIPO OLADEHINDE
