Lagos, Ogun, Rivers, Akwa Ibom and Imo have emerged as states with the most debt burden in 2021, according to data from the Debt Management Office (DMO).
These five states combined had a domestic debt stock of about N1.56 trillion, accounting for 34.9 percent of the total domestic debt owed by the sub-national governments in the country as of December 31, 2021.
Nigeria’s commercial hub, Lagos, topped the list with a total debt of N659 billion as at the end of December 2021, higher than N532 billion recorded in the third quarter of last year.
Ogun State came in next with a total of N232.62 billion debt as of December 2021 compared to N232.6 billion recorded in September 2021.
Rivers State is the third with N225.50 billion, even as the State’s domestic debt declined by N850 million compared to the third quarter of 2021.
Akwa Ibom State’s debt stood at N214.60 billion, from N234.85 billion in September 2021, making it the state with the fourth highest debt in Nigeria.
Read also: Every Nigerian owes N191,889 of national debt
According to DMO, Nigeria’s total public debt hit N39.5 trillion as at December 2021 from N38 trillion in September 2021.
Debt to GDP Ratio stood at 22.47 percent compared to 21.61 percent in 2020.
Patience Oniha, the director-general of the DMO, has said the country’s debt is within reasonable limits as the debt ratio still remains within Nigeria’s self-imposed limit of 40 percent.
Onoha, however, said that the Federal Government had taken concrete steps to address revenue challenges which made servicing of the debts burdensome.
The country’s revenue to GDP Ratio has remained low at 9.0 per cent compared to comparable countries like Ghana (12.5 percent), Kenya (16.6 percent), Angola (20.9 percent) and South Africa (25.2 per cent).
The huge cost of servicing debt is another challenge Nigeria has to deal with.
Last year, Nigeria had a debt service to revenue ratio of 70 percent and the International Monetary Fund (IMF) has projected that Nigeria will spend 92 percent of its 2022 earnings repaying debts.
Jigawa state recorded the lowest debt in 2021 with a total debt of N31.3 billion. Ebonyi came in next with a debt of N42.1 billion as at December 2021.
FCT also recorded a debt of N50.6 billion, emerging as the third state with the lowest debt burden while Kebbi and Nasarawa recorded N52.3 billion and N54.1 billion during the period.
