Economy

State Governments Contribute 16.74% of Nigeria’s Total Debt

By Ode Uduu

January 13, 2023

Nigeria’s total public debt rose to N44.06 trillion at the end of September from N42.85 trillion in June 2022. 

This debt is a combination of Federal Government’s and debts owed by state governments. 

While the Debt Management Office (DMO) didn’t provide a breakdown of external debts owed by the Federal Government and state governments as it did for domestic debt in September 2022, the state government contributed 19.93% of the total debt as of June 2022.

In its September update, the DMO only gave a breakdown of the domestic debt owed by the two tiers of government.

The data show that domestic debt, which stood at N26.23 trillion, accounted for 61.22% of the total N44.06 trillion debt profile. FG’s domestic debt was N20.95 trillion, while the state governments’ was N5.36 trillion.

FG’s domestic debt alone accounted for 80.07% of the domestic debt and 48.91% of the total debt while state governments owed 19.93% of domestic debt and 12.17% of the total debt profile.

However, its June breakdown shows that the FG owed N35.67 trillion of the N42.85 trillion in total public debt. State governments collectively owe N7.17 trillion of this amount. This indicates that the FG owed 83.26% of the total debt while the state government owed 16.74%.

The composition of FG debt to total debt has been between 78% to 84% from 2018 to date. By the end of 2018, the FG owed N19.23 trillion of the N24.39 trillion in total debt, representing 78.87%. That of the state government was N5.15 trillion, making 21.13%.

In 2019, the composition was 79.58% to 20.42% for the FG and state government. Its 2020 composition was 81.94% to 18.06% for the FG and state governments. It changed to 83.75% to 16.25% in 2021. By the end of June 2022, the composition was 83.26% to 16.74%.

The two tiers of government source funds from both foreign and domestic sources.

Foreign debt by composition shows that the FG had the largest share over the years. By the end of 2018, it owed N6.46 trillion of the total N7.76 trillion foreign debt. This means that 83.26% of the foreign debt was owed by the FG, while state governments owed 16.74% (N1.299 trillion) of the amount.

The composition at the end of 2019 was 83.51% to 16.49%, with the FG owing N7.53 trillion and the state government N1.49 trillion. 

Its 2020 composition was 86.17% to 13.83%, and it was 87.57% to 12.43% by the end of 2021.

The domestic debt profile also had a more significant proportion owed by the FG than the state governments. N16.63 trillion was the total domestic debt at the end of 2018. The FG owed N12.77 trillion, while the state governments owed N3.853 trillion. This gives a composition of 76.83% to 23.17%.

This composition changed to 77.66% to 22.34% in 2019, with the FG domestic debt standing at N14.27 trillion and N4.11 trillion for the state governments. 

2020 composition was 79.29% to 20.71%. In 2021, it was 81.19% to 19.93%. Details of the total domestic debt by the end of September 2022 show that of the N26.92 trillion owed in domestic debt, N21.55 trillion owed by the FG, and N5.36 by the state government. This gives a composition of 80.07% to 19.93% for FG and state governments, respectively.