The total debts owed by Nigeria’s 36 states reached N11.47 trillion as of June 30, 2024, reflecting a 14.57 percent increase from N10.01 trillion at the end of December 2023. This rise persists despite revenue allocations from the Federal Accounts Allocation Committee (FAAC) and internally generated revenues (IGR) at the state level.
According to the Debt Management Office (DMO), external debt for states and the Federal Capital Territory (FCT) grew from $4.61 billion to $4.89 billion, largely influenced by the naira’s devaluation from N899.39 per dollar in December 2023 to N1,470.19 per dollar by June 2024. This currency shift led to a 73.46 percent increase in naira-denominated debt from N4.15 trillion to N7.2 trillion.
Meanwhile, domestic debt for states and the FCT declined from N5.86 trillion to N4.27 trillion. However, states and the FCT collectively held a smaller share of Nigeria’s total public debt in June, accounting for N134.3 trillion in national debt, down from 10.29 percent of total debt in December 2023.
The debt growth highlights the impact of currency devaluation on external borrowing costs, placing additional strain on state finances amidst ongoing economic challenges.
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