The domestic debt of Nigeria’s 36 states and the Federal Capital Territory (FCT) increased by N198.96 billion in Q2 2024, reflecting a 5% rise from N4.068 trillion in March 2024 to N4.267 trillion in June 2024. This information comes from the latest subnational debt report released by the Debt Management Office (DMO).
The report highlights variations in borrowing patterns, with some states reducing their debt while others recorded significant increases. Below is a breakdown of the top 10 Nigerian states with the highest domestic debt as of Q2 2024.
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10. Benue State
Domestic Debt: N116.88 billion
Change: +N144.24 million
Benue, known as the Food Basket of the Nation, showed fiscal discipline with only a slight increase in debt. The minimal rise indicates a strategic approach to funding projects without significantly increasing financial obligations.
9. Akwa Ibom State
Domestic Debt: N132.87 billion
Change: -N10.06 billion
Akwa Ibom, a major oil-producing state, reduced its debt by 7%. This decline reflects deliberate efforts to manage its finances and reduce borrowing amid rising expenditures.
8. Niger State
Domestic Debt: N146.29 billion
Change: +N60.22 billion
Niger recorded a 70% surge in domestic debt, driven by heavy investments in infrastructure. While these projects may boost the state’s economy, the rapid debt increase raises sustainability concerns.
7. Bauchi State
Domestic Debt: N147.23 billion
Change: +N38.84 billion
Bauchi’s domestic debt rose by 36%, reflecting increased borrowing for infrastructure and social programs. The state must enhance its internally generated revenue (IGR) to manage this growing debt effectively.
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6. Cross River State
Domestic Debt: N155.49 billion
Change: -N682.14 million
Cross River recorded a slight decrease in debt, highlighting a balanced fiscal approach despite its ambitious tourism and industrialization projects.
5. Imo State
Domestic Debt: N159.19 billion
Change: -N3.87 billion
Imo reduced its debt by 2%, signaling fiscal prudence while managing ongoing infrastructure and social investments.
4. Ogun State
Domestic Debt: N211.13 billion
Change: -N10.09 billion
Ogun, an industrial hub, reduced its debt by 5%, aligning with its strategy to attract investments and boost industrial growth.
3. Delta State
Domestic Debt: N304.54 billion
Change: -N30.36 billion
Delta, an oil-rich state, achieved a 9% reduction in debt, reflecting improved financial management amid fluctuating oil revenues.
2. Rivers State
Domestic Debt: N389.20 billion
Change: +N156.62 billion
Rivers recorded the highest absolute debt increase, with a 67% rise. The state’s borrowing may be linked to large-scale infrastructure projects aimed at economic diversification.
1. Lagos State
Domestic Debt: N885.99 billion
Change: -N43.42 billion
Lagos remains Nigeria’s most indebted state but managed to reduce its debt by 5%. The state’s strong revenue base, supported by taxes and business activities, enables effective debt management.
The Q2 2024 debt report underscores diverse fiscal strategies among Nigerian states. While some states like Lagos and Delta successfully reduced their debt, others, such as Rivers and Niger, recorded significant increases. Effective debt management and robust revenue generation remain critical for sustaining economic growth and development across the country.
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