13 Nigerian States Allocate N243.2 Billion to Debt Charges in 9 Months Amidst Developmental Issues

A recent analysis by SaharaReporters of budget performance reports from 13 selected Nigerian states has revealed that these states spent a staggering N243.2 billion on public debt charges in the first nine months of 2024.

The state that incurred the highest debt charges was Ondo State, which allocated N64.6 billion. Other states included Oyo with N20.5 billion, Yobe at N9.2 billion, Kogi with N18.1 billion, Taraba at N21.1 billion, and Ekiti with N12.9 billion. Additionally, Katsina spent N12.7 billion, Rivers N42 billion, Osun N15.3 billion, Jigawa N2.1 billion, Kwara N9.3 billion, Anambra N4.5 billion, and Abia N10.9 billion.

Debt charges, defined as the interest payments on loans taken by state governments, have reached critical levels, consuming vast sums of money within a short timeframe. This trend raises significant concerns given the ongoing developmental challenges faced by various states. Experts argue that the substantial funds allocated to servicing debt detract from crucial development initiatives, stunting progress.

A World Bank report highlighted that developing countries paid a record $443.5 billion in public debt in 2022, with interest payments consuming a significant portion of low-income countries’ export revenues. High interest rates have exacerbated debt vulnerabilities for all developing nations, including Nigeria.

Many Nigerian states are grappling with a severe revenue crisis, which compels them to rely heavily on loans, leading to overwhelming debt charges. This cycle restricts states’ capabilities to tackle pressing issues such as inadequate water supply, healthcare deficiencies, and deteriorating road infrastructure.

To illustrate the severity of the situation, Ondo State’s debt charges alone reached N64 billion in the first nine months of 2024—approximately three times its internally generated revenue of N24.4 billion. This amount also exceeds the N19 billion allocated for the state’s ministry of works and infrastructure capital expenditure.

While Ondo State invested only N141 million in capital expenditure for water resources, sanitation, and hygiene, it spent an astonishing N64 billion on debt servicing. The state also faces challenges such as flooding, which has severely impacted lives and property, and a significant portion of its population lacks access to essential services. Currently, 66% of households in Ondo lack sanitary facilities, and 51% do not have access to clean drinking water.

The state budget for rehabilitating boreholes was a mere N100 million, yet it shockingly spent 640 times that amount—N64 billion—on debt charges alone.