The cumulative debt of Nigeria’s 36 states surged to N11.47 trillion as of June 30, 2024, marking a significant rise despite continuous allocations from the Federal Accounts Allocation Committee (FAAC) and the states’ internally generated revenues (IGRs). Data from the Debt Management Office (DMO) highlights a 14.57 percent increase from the N10.01 trillion recorded in December 2023.

Debt figures show external liabilities for states and the Federal Capital Territory (FCT) rising from $4.61 billion to $4.89 billion within the first half of 2024. When converted to naira, debt levels increased dramatically by 73.46 percent, jumping from N4.15 trillion to N7.2 trillion. This escalation is largely attributed to the devaluation of the naira, which fell from N899.39/$1 in December 2023 to N1,470.19/$1 by mid-2024.

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Domestic debt, however, saw a decrease, with the combined total for states and the FCT dropping from N5.86 trillion to N4.27 trillion during this period. Despite the decrease in domestic liabilities, the overall share of states and the FCT in Nigeria’s total public debt remained substantial, standing at N134.3 trillion in June 2024. This share represented a reduction from their previous 10.29 percent stake recorded in December 2023, though the actual debt numbers in nominal terms increased.

This rising debt level reflects ongoing fiscal challenges facing Nigerian states, even as they work to bolster their revenue through internal generation and rely on federal allocations. The financial strain underscores the need for sustainable debt management strategies to address the growing burden on state economies, particularly in the context of currency devaluation and fluctuating revenue streams.