States Spend N251.79bn on Debt Servicing, Obtain N310.99bn Loans Within Nine Months
Despite increased monetary allocations from the Federation account, twenty-two states in Nigeria have spent a total of N251.79bn to service debt borrowed by past administrations within nine months of assuming office. A total of N310.99bn in fresh loans was also obtained between July 2023 and March 2024. These findings were revealed in budget implementation reports of each state sourced from the Open Nigerian States website.
The states faced challenges of unpaid salaries, mounting pension liabilities, and rising inflation amidst increasing debt burdens inherited from their predecessors. Despite this, the states continued to obtain more loans to cater to different expenditures. The report also highlighted the states that received the highest loans, attributing the increase in debt servicing costs to factors like the devaluation of the naira.
Experts flagged concerns about the impact of high debt servicing and loans on economic development at the sub-national level. Efforts to get reactions from government officials provided varying perspectives on debt servicing as part of governance responsibilities.
By: Animasahun Salman and Peter Dada
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