ANALYSIS: Six new governors increased their domestic debts by N109.21bn in 6 months

At least six new governors have collectively increased their domestic debts by N109.21 billion within six months (June-December 2023) since they assumed office.

This is based on TheCable Index analysis of states’ domestic debt profile data published by the Debt Management Office (DMO) for June and  December 2023, respectively.

The six states are Katsina, Niger, Rivers, Zamfara, Plateau, and Cross Rivers.

Under the leadership of Siminalayi Fubara, the domestic debt profile of Rivers surged from N225.51 billion to N232.58 billion. This, according to the data, increased the state’s debt by N7.7 billion or 3 percent within the six months under review.

The DMO said Umar Radda, governor of Kastina, borrowed about N36.94 billion (59 percent increase) between December and June 2023, as the state’s debt moved from N62.37 billion to N99.31 billion.

Also, Umar Bago, governor of Niger, accumulated a debt of N17.85 billion — indicating a 15 percent domestic debt increase from N121.95 billion to N139.80 billion in six months.

Similarly, in Zamfara, Dauda Lawal, the state governor, was said to have borrowed N14.26 billion in the review period, sending the state’s domestic debt to N110.57 billion — from N96.31 billion.

According to the data, Caleb Mutfwang, Plateau governor, increased the state’s debt from N157.62 billion to N173.93 billion between June and December last year — up by N16.31 billion or 10 percent.

The DMO said it recorded an 8 percent increase in the domestic debt profile of Cross River after Edet Otu, the state governor, borrowed the sum of N16.15 billion — moving the debt burden from N204.05 billion to N220.20 billion in six months.

STATES THAT DECREASED THEIR DOMESTIC DEBT BY N119 BILLION

Meanwhile, further analysis shows that 11 states reduced their domestic debts.

The states — Delta, Ebonyi, Akwa-Ibom, Abia, Sokoto, Kaduna, Taraba, Enugu, Jigawa, Benue, and Kebbi — collectively reduced their debt by N119.96 billion.

Sheriff Oborevwori, governor of Delta, reduced the state’s domestic debt from N465.40 billion to N373.41 billion, representing a decrease of N91.99 billion.

Francis Nwifuru, governor of Ebonyi, cut the domestic debt of the state from N76.14 billion to N70.44 billion — down by N6.30 billion.

The debt office said Umo Eno, governor of Akwa Ibom also reduced the state’s domestic debt stock by N9.10 billion, which fell from N199.58 billion in June to N190.48 billion in December. 

Alex Otti, governor of Abia, reduced the state’s debt from N142.47 billion to N138.64 billion (a decline of N3.83 billion).

On his part, Ahmad Aliyu, the governor of Sokoto, made a reduction of a decline of N2.46 billion as the state’s domestic debt crashed from N91.68 billion to N89.22 billion.

For Kaduna state, the governor, Uba Sani, moved the state’s domestic debt from N87.28 billion to N85.52 billion — down by N2.24 billion.

Agbu Kefas, governor of Taraba reduced the domestic debt from N83.13 billion in June to N81.33 billion in December, a 2 percent cut or N2.20 billion.

In addition, Peter Mbah, governor of Enugu, also reduced the state domestic debt from N93.20 billion to N92.21 billion – down by 1 percent or N99 million.

Umar Namadi, governor of Jigawa, cut the domestic debt of the state from N43.13 billion to N42.76 billion, recording adecreas of -1 percent to N37 million.

The DMO said Hyacinth Alia, governor of Benue, also made an effort to reduce the domestic debt of the state from N187.18 billion in June to N186.94 billion in December — a decrease of -0.1 percent or N24 million in six months.

Nasir Idris, governor of Kebbi, also attempted to reduce the state’s debt which moved from N60.94 billion in June to N60.69 billion in December 2023, recording a decrease of N25 million.

STATES WITH INCREASED FOREIGN DEBT

In addition, states such as Ebonyi ($37.54 million), Kaduna ($17.69 million), Kano ($6.6 million), Niger ($1.27 million), Plateau ($831,008), Sokoto ($499,472), Taraba ($1.51 million), Cross River ($59.95 million), and Zamfara ($655,563) borrowed a total of $124.54 million from external sources like World Bank and International Monetary Fund (IMF) within the six-month period.

Using the official exchange rate as at December 31, 2023, the total foreign debt by these states stood at N111.24 billion.

According to the DMO, the total domestic debt for all 36 states and FCT stood at N5.86 trillion, while foreign debt was $42.49 billion at the end of last year.

Meanwhile, President Bola Tinubu had assured that his administration would not continue with the massive borrowings of the previous government to fund its expenditures.

In 2023, state governors got the most Federal Account Allocation Committee (FAAC) allocations in at least seven years.

The rise in FAAC allocations to the three tiers of government, especially the states, followed the removal of the subsidy on petrol and currency reforms by the Tinubu administration. The reforms have reportedly led to a 40 percent boost in income.

TheCable Inex analysis of the 2023 FAAC monthly allocations showed that the subnational and local government councils got the highest allocation of N627.73 billion in September, followed by N610.5 billion in December, N555.75 billion in August, N533 billion in November, N514 billion in July, and N497.97 billion in October.