Richest state Lagos makes N45b IGR per month but owes 12x that
By Jeph Ajobaju, Chief Copy Editor
Nigeria’s richest state Lagos makes N45 billion in internally generated revenue (IGR) per month, more than those of 31 states combined, but also owes the greatest amount of N532.12 billion, or 12 times its monthly earnings.
The impact of the IGR and the borrowings is seen mainly in infrastructure, particularly in the upgrade of the trimodal transport system of rail, road, and water.
New roads are being built and old ones rehabilitated in the melting pot of 22 million residents who power Africa’s fifth largest economy. There are street lights. Bus Rapid Transit reduces stress. Boats are operating. Lite rail is about taking off.
But power supply is unstable and homes use private generators; and they sink boreholes because public water supply is limited. Both education and healthcare are free; however, they are underfunded and poorly staffed.
Lagos is at least putting things on the ground for taxpayers. Unlike Abuja from where Muhammadu Buhari is taxing Nigerians to death to pay for his loans and for his officials to steal – without tangible benefit for the populace.
Domestic debt owed by state governments and the Federal Capital Territory (FCT) rose to N4.2 trillion in the third quarter of 2021 (Q3 2021) from N4.12 trillion in Q2 2021.
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Lagos, Rivers, Akwa Ibom owe the most
Lagos, Rivers, and Akwa Ibom are the three most indebted, according to latest data from the Debt Management Office (DMO), reported by The PUNCH.
The N4.2 trillion debt owed by the 36 states and the FCT is 23.04 per cent of the country’s domestic debt of N18.23 trillion in Q3 2021, down from N21.75 trillion in Q2 2021.
Lagos, Ogun, and three oil-producing states – Rivers, Akwa Ibom, and Delta – are the top five debtors, with a combined domestic stock of about N1.39 trillion.
The five states account for 33.1 per cent of total domestic debt owed by the subnational governments in Q3 2021 broken down as follows:
- Lagos – N532.12 billion
- Akwa Ibom – N234.85 billion
- Rivers – N226.35 billion (Q2 2021)
- Delta – N207.17 billion
- Ogun – N192.42 billion
Other high debt states
- Cross River – N160.69 billion
- Imo – N151.31 billion
- Plateau – N145.86 billion
- Bayelsa – N145.8 billion
- Osun – N132.64 billion
- Benue – N128.35 billion
- Kano – N102.35 billion
- Oyo – N93.26 billion
- Enugu – N69.17 billion
The DMO had earlier announced that Nigeria’s public debt amounted to N38.01 trillion or $92.63bn in Q3 2021.
Total debt stock rose by N2.54 trillion to N38 trillion in Q3 2021 against N35.47 trillion in Q2 2021.
It explained that “the increase of N2.540tn when compared to the corresponding figure of N35.465tn at the end of Q2 2021 was largely accounted for by the $4bn Eurobonds issued by the government in September 2021.
“The issuance of the $4bn Eurobonds has brought significant benefits to the economy by increasing the level of Nigeria’s external reserves, thereby supporting the naira exchange rate and providing necessary capital to enable the Federal Government finance various projects in the budget.
“The triple tranche $4bn Eurobond, issued in September 2021 was for the implementation of the New External Borrowing of $6.18bn in the 2021 Appropriation Act.”
Nigeria’s debt stock
The DMO stressed the need for Abuja to increase revenue to lower debt and to reduce new loans.
Both the Senate and the House of Representatives last week approved Buhari’s request to obtain another $5.8 billion loan plus a $10 million grant from Germany.
Nigeria’s debt rose to N38.005 trillion or $92.626 billion in in Q3 2021, according to latest figures released by the DMO.
The sum includes total external and domestic debts of the federal and 36 state governments as well as the FCT.
Nigeria spent N1.8 trillion on debt servicing in the first five months of this year, 98 per cent of revenue, as total loans rose to $87.24 billion in Q1 2021 from $86.39 billion in Q4 2020.
Under Buhari, Nigeria’s debt had jumped by N20.8 trillion to N32.92 trillion between June 2015 and December 2020, and to N33.11 trillion in Q1 2021, according to the DMO.