Lagos and Delta states and the Federal
Capital Territory Administration are the most exposed to domestic
creditors, statistics obtained from the Debt Management Office have
shown...
The statistics contained in the 2016
Annual Report of the DMO showed that the combined domestic debts of the
two states and the FCTA stood at N683.16bn as of the end of September
2016.
The DMO had helped the states to build
their capacity in managing and reporting their debt commitments to
various bodies, including banks and foreign institutions. They are also
required to report their debts to the DMO on a quarterly basis.
Analysis of the debt data shows that
nine states of the federation owe domestic creditors a total of N1.5tn.
This represents 53.15 per cent of the country’s total subnational
domestic debt of N2.82tn as of September 2016.
The states are Lagos, Delta, Osun, Akwa Ibom, Rivers, Bayelsa, Cross River, and Oyo, as well as the FCT.
On an individual basis, Lagos State owed
N265.77bn to domestic creditors as of September 2016. This represents
9.41 per cent of the combined domestic debt of the states and the FCT.
Lagos was followed by Delta State, with a
domestic debt of N237.79bn, representing 8.42 per cent of the
subnational domestic debt.
In the third position was the FCTA,
with a domestic debt status of N179.55bn, representing 6.36 per cent of
the country’s subnational domestic debt.
Osun followed with a domestic debt
status of N149.09bn, representing 5.28 per cent; while Akwa Ibom State
had a domestic debt of N147.58bn, representing 5.23 per cent of the
country’s subnational domestic debt.
Rivers State had a total of N142.42bn in
domestic debts. This represents 5.05 per cent of the total subnational
domestic debt. Bayelsa, on the other hand, had a domestic debt status of
N130.81bn, representing 4.63 per cent of the nation’s subnational
domestic debt.
Cross River had a domestic debt of
N127.38bn, representing 4.51 per cent of the subnational domestic debt;
while Oyo had N119.97bn, representing 4.25 per cent.
Thus, among the six states that make up
the South-South geopolitical zone, only Edo, with a domestic debt of
N45.03bn, was not among the states with more than N100bn. Our
correspondent, however, reported that Edo was among the states with the
heaviest burden in foreign debt exposure.
Anambra State had the least exposure to
domestic creditors. As of September 2016, its domestic debt stood at
N4.04bn, representing 0.14 per cent of the country’s subnational
domestic debt.
Other states with low exposure to local
creditors include Yobe, with N13.72bn; Jigawa, N19.01bn; Katsina,
N22.11bn; Sokoto, N22.85bn; Borno, N25.7bn; and Ebonyi, N27.98bn.
Domestic debts in the country attract
high interest charges. The Federal Government recently sought an
alternative domestic debt route by raising N100bn from the Islamic sukuk
bond for road infrastructure development. The bond does not attract
interest charges, but bond holders are entitled to a share of the
profit.
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