New State Governors Rack Up N226.8 Billion Debt in First Six Months, DMO Raises Concerns

New State Governors Rack Up N226.8 Billion Debt in First Six Months, DMO Raises Concerns

Newly released data from the Debt Management Office (DMO) has revealed a concerning trend in the borrowing activities of 13 newly inaugurated state governors within the first six months of assuming office.

Collectively, these governors borrowed a staggering sum of N226.8 billion from both domestic and external financiers.

An analysis of the latest sub-national debt reports disclosed by the DMO indicates that a total of 16 state governors opted to increase their state’s debt profile during this period, accumulating a combined sum of N509.3 billion.

This surge in debt comprised N243.95 billion from domestic sources and $298.5 million (equivalent to N265.37 billion based on the exchange rate of N889/$) from external creditors.

The breakdown of the statistics sheds light on the borrowing patterns of the states, with some governors substantially augmenting their state’s debt burden.

Notable examples include Cross Rivers Governor Bassey Otu, who secured the highest loan amounting to N16.2 billion from domestic creditors and $57.95 million from foreign lenders.

Katsina State followed suit, with its debt skyrocketing by N36.93 billion to reach N99.3 billion by December 2023.

Furthermore, the analysis unveils the borrowing activities of other states such as Niger, Plateau, Rivers, Zamfara, and the Federal Capital Territory, all of which accumulated significant amounts from domestic sources.

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Despite a substantial rise in allocations to state governments, with the Federal Account Allocation Committee disbursing the highest sums in at least seven years, the surge in borrowing raises concerns about the fiscal management strategies employed by some state governments.

Additionally, governors of Ebonyi, Kaduna, Kano, Niger, Plateau, Sokoto, Taraba, and Zamfara states engaged in foreign borrowing, with the total external debt reaching $125.1 million.