FG deducts ₦415bn from state governments' allocations for debt servicing

The Federal Government has debited over ₦415 billion from allocations due to state governments for debt servicing.

According to data from the Federation Account Allocation Committee (FAAC) disbursement reports published by the National Bureau of Statistics (NBS), the FG carried out the deductions between 2019 and 2023.

The total amount of funds deducted from the states governments’ accounts was recorded as ₦415.12 billion. However, funds deducted in some states like Lagos, Kaduna and Cross River topped the deductions in other states.

The FG debited Lagos state with about ₦131.1 billion. Kaduna followed suit with a deduction of ₦45.85 billion, and Cross River with ₦21.59 billion deducted.

Other states that were debited include Oyo state with ₦18.25 billion, Rivers state with ₦14.76 billion, Ogun state with ₦10.31 billion and ₦10.92 billion deducted from Edo state.

Other states that had low deductions include; Borno (₦1.55bn), Yobe (₦2.1bn) and Zamfara (₦2.1bn).

A breakdown of the deductions for the five years showed that in 2019, the deductions incurred by the sub-nationals were ₦57 billion, the amount rose to ₦74 billion in 2020 and further increased to ₦86.2 billion in 2021.

In 2022, the figure was recorded as ₦78 billion and ₦120.01 billion as of December 2023.

Nigeria was able to service its debt obligations in 2023 by spending the sum of ₦7.8 trillion. This amount indicated an increase of 121% compared to ₦3.52 trillion incurred in the previous year.

According to the Debt Management Office of the Federation (DMO), Nigeria's total public debt stock, comprising debt owed by the federal government, states and the Federal Capital Territory (FCT) increased by 10.7% quarter-on-quarter (QoQ) from ₦87.87 trillion in Q3 of 2023 to ₦97.34 trillion in (Q4 2023).

The ₦97.3 trillion public debt stock comprises domestic debt of ₦59.12 trillion and external debt of ₦38.22 trillion.