…as debt burden jumps to ₦41,766 per citizen
By Seun Ibiyemi
Despite persistent fiscal tightening and increased earnings, Nigeria’s sub-national governments are intensifying their debt burden, despite ongoing efforts at fiscal tightening.
Fresh data from BudgIT’s State of States 2024 report reveals a worrying upward trend, placing a significantly heavier financial liability on the average citizen.
The report, titled “A Decade of Subnational Fiscal Analysis: Growth, Decline, and Middling Performance,” was launched on Tuesday in Abuja and highlights a critical deterioration in state finances.
The average debt per capita has climbed to ₦41,766 in 2024, marking an increase from the ₦40,469 recorded in the previous year. This persistent accumulation of debt underscores the inability of many states to manage their liabilities effectively amid economic challenges.
The BudgIT analysis found that a significant portion of the debt is concentrated in a few areas. Specifically, twelve states have debt per capita figures that exceed the national average of ₦41,766. These states include major economic hubs and regions such as Lagos, Edo, Kaduna, and Cross River.
The report paints a clear picture: while the overall federation’s debt is rising, certain states are facing a disproportionately deeper fiscal crisis, necessitating urgent and comprehensive financial reforms to prevent future instability.
According to the findings, 12 states including Lagos, Edo, Kaduna, and Cross River exceeded the national average.
Lagos and Edo recorded the highest debt per capita, each surpassing ₦100,000, while other states above the national threshold include Ogun, Ekiti, Bayelsa, Bauchi, Abia, Enugu, Ebonyi, and Adamawa.
BudgIT explained that the increase in average debt per person underscores the growing strain on state finances despite ongoing repayment efforts. It attributed the rise to mounting liabilities amid persistent economic headwinds.
The report stated, “Additional subnational liabilities continued to present challenges, totalling ₦1.24 trillion in 2024, up from ₦1.19 trillion in 2023.
These include contractor arrears (₦434.87 billion), pension and gratuity obligations (₦626.81 billion), salary and staff claims (₦33.74 billion), judgement debts and litigation (₦62.33 billion), and other miscellaneous liabilities (₦73.25 billion).”
BudgIT’s data further showed that the 35 reporting states (excluding Rivers) repaid over $200 million in foreign debts in 2024, reflecting an effort to reduce exposure to naira volatility.
Lagos, Enugu, and Gombe recorded the largest reductions in foreign obligations $74.56 million, $33.39 million, and $21.88 million respectively.
On the domestic front, subnational governments collectively repaid over ₦2 trillion during the same period, with 31 states reducing their domestic debt by at least ₦10 billion. Lagos, Cross River, and Delta each cut over ₦100 billion.
BudgIT clarified that for consistency, it relied on data published by the Debt Management Office (DMO) as of December 31, 2024, using a uniform exchange rate of ₦1,535.3176 per dollar to calculate foreign debt.
Speaking at the event, the Chairman of the Presidential Fiscal Policy and Tax Reforms Committee, Mr. Taiwo Oyedele, cautioned that while borrowing can support development, unproductive debt accumulation poses significant risks.
“Borrowing is not the problem. Unproductive accumulation of debt is the problem,” Oyedele said.
“If you pay taxes and you do not follow the money, you are at best making a donation. Beyond dividends of democracy, you must demand value for the taxes paid.”
The State of States 2024 report underscores the urgent need for stronger fiscal discipline, improved debt transparency, and citizen accountability to ensure that borrowing translates into tangible socio-economic development across Nigeria’s 36 states.