Lagos State, with the reputation of having the biggest economy in Nigeria, is also the highest debtor to foreign creditors among subnational governments in the country, statistics obtained from the Debt Management Office have shown.
A document titled: ‘States and Federal Governments’ External Debt Stock as at 31st December, 2017’, also showed Kaduna and Edo states made up the top three indebted states in the country, going by their external borrowings.
With a foreign debt of $1.47bn, Lagos is the only state with external debt of over $1bn, as its proportion of the total $4.12bn owed by the states to external creditors is 35.68 per cent.
Kaduna State, owes a total of $238.28m, while Edo owes $232.2m. This means that Kaduna holds 5.78 per cent of the country’s subnational external debt, while Edo holds 5.63 per cent of the subnational external loan commitments.
Other top debtors among the states include Cross River, with external debt of $167.92m; Enugu, $133.11m; Bauchi, $109.83m; and Ogun, $107.45m.
Some of the least indebted states of the federation are Borno, $22.59m; Taraba, $26.56m; Yobe, $29.56m; Plateau, $30.07m; Kogi, $33.03m; Jigawa, $33.5m; Federal Capital Territory, $33.72m; Zamfara, $34.83m; and Benue, $35.5m.
As of December 31, 2017, Nigeria’s foreign debt stood at $18.91bn. Out of this amount, the Federal Government owes a total of $14.8bn.
This means that the Federal Government accounts for 78.27 per cent of the country’s external debt commitments, while the state governments account for the balance.
The Federal Government has been very active recently in external borrowing in a bid to achieve 40 to 60 per cent foreign to local borrowing ratio.
The plan, according to the DMO, is to ensure that the Federal Government does not crowd out the private sector from the local debt market.
It has also been borrowing from the external debt market to refinance maturing local debts in a bid to take advantage of lower interest rates obtainable from foreign sources.
However, domestic debts still dominate the country’s debt portfolio, with local sources accounting for about 73 per cent, while foreign make up the balance of 27 per cent of the debt portfolio.