States forfeit N169.4bn to debt servicing in 3 months

Thirty-six states and Federal Capital Territory (FCT) lost some N169.4 billion of their allocation from Federation Account to different kinds of debt servicing between January and March 2017.

As a result, sub-national governments were only left with N366.993 billion of the gross allocation of N455,991,731,222.71, which originally accrued to them.

Details of records from Federation Account Allocation Committee (FAAC) and National Bureau of Statistics also indicated that as at December 31, 2016, the country’s total foreign and domestic debt stood at $11.41 billion and N14.02 trillion respectively.

Further disaggregation of the foreign component showed that $7.99 billion was multilateral; $198.25 million was bilateral (AFD) and $3.22 billion from Exim Bank of China credited to Federal Government.

Total FGN debt accounted for 68.72 per cent of Nigeria’s foreign debt while all states and Federal Capital Territory (FCT) accounted for the remaining 31.28 per cent. Similarly, total FGN debt accounted for 78.89 percent of Nigeria’s total domestic debt while all states and FCT accounted for 21.11 per cent balance.

Lagos State has the highest foreign debt profile among the 36 states and FCT accounting for 38.70 percent while Kaduna (6.25 per cent), Edo (5.15 per cent), Cross River (3.22 per cent) and Ogun (2.90 per cent).

Similarly, Lagos State has the highest domestic debt profile among the states and FCT accounting for 10.54 per cent while Delta (8.15 per cent), Akwa Ibom (5.25 per cent), FCT (5.16 per cent) and Osun (4.97 per cent) followed in that order.

During the first three months under review, states shared N106,561,376,250.04 from valued added tax proceeds; N49,474,490,088.27 from foreign exchange gain and N59,715,043,117.46 from excess petroleum profit tax.

A breakdown of the debt service deductions revealed that N89,098,570,940.7 went to repay part of external debt; N30,137,465,603.43 was deducted to service contractual obligations; while N50,230,469,825.15 was devoted to service “other deductions”.

Other Deductions according to FAAC documents refers to loans taken for National Water Rehabilitation Projects, National Agricultural Technology Support Programme, Payment for Fertilizer, State Water Supply Project, State Agricultural Project and National Fadama Project.

During 2016, Lagos, easily the richest state got a total FAAC allocation of N81.097 billion but recorded N302.425 billion from independent sources.

Its external and domestic debt profile stood at $1.380 billion and N311.755 billion respectively by end 2016.

During that year, Kaduna collected N40.118 billion from FAAC and generated N17.051 billion internally.

The state was second to Lagos in terms of external debt with $222.882 million.

Its domestic debt stood at N63.267 billion by the end of 2016.

Edo State is another highly indebted state, which made N26.215 billion from FAAF sources in 2016.

Internally Generated Revenue (IGR) for Edo State for 2016 was N23.041 billion with external debt of $183.641 million and domestic of N45.091 billion.

For Cross River State, total FAAC allocation stood at N18.247 billion while its IGR was N14.776 billion. The state has external and domestic debt of $114.995 and N128.142 respectively.

While Ogun State got N20.247 billion total allocations from FAAC, its IGR stood at N72.983 billion while external debt and domestic debt stood at $103.416 billion and N75.921 billion respectively.

Akwa Ibom got highest allocation of N104.970 billion from FAAC in 2016 and made N23.269 billion from IGR sources.

It has total external debt of $50.555 million and domestic debt of N155.431 billion

Figures also showed that Delta State got N73.319 billion from FAAC while making N44.057 billion from independent sources.

The state’s external debt was $43.318 million with N241.231 billion owed to local creditors.

The documents gave Osun as another heavily indebted state earning N6.929 billion from FAAC and N8.884 from IGR.

The state has total external debt of $70.533 million and N147.069 billion domestic debt.