Analysis of the Debt Profile of Nigerian States

Based on the data obtained from the Debt Management Office (DMO), Nigeria’s debt profile was N28.63 trillion as at the last day of March 2020. This represents N1.23 trillion increase when compared to N27.40 trillion as at the last day of December 2019.

Of this total amount, N18.64 trillion or 65.11% of the total debt, is domestic debt stock outstanding while the remaining N9.99 trillion represents external debt stock outstanding.

Of the domestic debt stock outstanding, the 36 states and the FCT have total domestic debt stock of N4.11 trillion while the remaining 14.53 trillion what the FGN owes domestic lenders.

Analysis into the domestic debt profile of the 36 states and FCT shows that Lagos state with total debt of N444.23 billion has the highest domestic debt stock outstanding among the states and this represents 10.82% of the total domestic debt stock. Lagos, Abuja and Port Harcourt in combined have total debt worth 19.92% of the total domestic debt stock of the 36 states and the FCT. Of the top 10 states based on debt, only Lagos, Ogun, Rivers, Akwa-Ibom and Delta states are among the top 10 states based on 2019 Internally IGR.

Lagos state generated N398.73 billion in IGR in the whole of 2019, Rivers state generated N140.40 billion in Internally Generated Revenue (IGR) while Ogun state generated IGR of N70.92 billion in 2019. Akwa-Ibom and Delta state generated IGR of N32.29 billion and N64.68 billion respectively in 2019.

Based on Geo-Political Zones, our analysis reveal that the South-South region have the most domestic debt stock which represents 24.07% of the total domestic debt stock outstanding of the 36 states and FCT. Rivers, Akwa-Ibom and Delta state have their domestic debt stock outstanding at N266.94 billion, N240.03 billion and N230.75 billion as at 31st March, 2020.

The South-West region followed closely with N968.84 billion in total domestic debt stock outstanding majorly influenced by the domestic debt stock of Lagos state which alone is N444.23 billion or 45.85% of the total debt of the South-Western states. Ogun and Osun state have their domestic debt stock outstanding at N143.53 billion and N137.31 billion respectively. Worthy to note that of the top 10 states with the highest domestic debt in the country, five are in the South-South, three are in the South-West, one in the North-Central and the remaining one in the South-Eastern part of the country.

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In the North-Central region, Plateau state has the highest amount of domestic debt stock outstanding. The state alone accounts for 21.65% of the total domestic debt of the 6 states in the region. Kogi state followed closely with total domestic debt stock outstanding of N129 billion while Benue state has domestic debt stock of N116 billion. It is worthy to note that Benue, Plateau and Kogi state are ranked 18th, 19th and 20th in the IGR rank of states in 2019. While Benue state generated N17.85 billion in IGR in the whole of 2019, Plateau state generated N16.48 billion and Kogi state generated N16.39 billion.

The North-East and North-Western regions generally have low domestic debt profile when compared with the other regions (safe South-East). For example, the domestic debt profile of all the states in the North-West region is a little above the domestic debt profile of Lagos state alone. While this is so, we do note that even in terms of IGR, the North-Western states are far behind. For example, they generated combined IGR of N148.77 billion which is just 37.31% of the amount of IGR generated by Lagos state during the same period of 2019.

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