NewStats: 3,264,665 , 8,184,374 topics. Date: Wednesday, 11 June 2025 at 10:42 PM 724s1v

States and local governments owed a combined N4.09tn to banks and the Central Bank of Nigeria as of December 2024.

Fresh data released in CBN’s latest quarterly statistical bulletin showed that the figure represented a slight reduction of N112bn or 2.7 per cent compared to the N4.20tn recorded in December 2023, suggesting a marginal improvement in the subnational debt profile.

A breakdown of the December 2024 data showed that commercial and merchant banks ed for the largest portion of the debt at N2.41tn, representing 58.9 per cent of the total. This marked a decline from the N2.64tn owed to them at the end of 2023, indicating a reduction of N233bn within the year.

Meanwhile, exposure to the Central Bank rose from N1.56tn in 2023 to N1.68tn in 2024, ing for 41.0 per cent of total subnational debt. This upward trend suggests increased reliance by states and local governments on direct funding from the apex bank.

The bulletin also captured for the first time an exposure of N3.77bn from non-interest banks to subnational entities, while primary mortgage and microfinance banks reported no outstanding claims.

An analysis of the 2024 data reveals a fluctuating trend in subnational borrowing, with January recording one of the highest values in the first half of the year.

The total claims by Nigerian financial institutions on state and local governments rose to N4.29tn in January 2024, indicating a 20.01 per cent increase from the N3.57tn recorded in January 2023.

The claims then dipped to N4.10tn in February and N4.09tn in March before falling significantly to N3.52tn in April, marking a 14.07 per cent month-on-month decline and the only year-on-year contraction of the year at 5.68 per cent.

Throughout the year, the bulk of the credit to state and local governments was provided by the Central Bank and commercial and merchant banks. In January, the CBN held N1.56tn of the claims, ing for 36.38 per cent, while commercial and merchant banks ed for N2.73tn or 63.62 per cent.

This pattern of distribution persisted over the months, although April witnessed a notable shift. In that month, the CBN’s share rose to 45.17 per cent of total claims, while commercial bank exposure dropped to 54.71 per cent, coinciding with a period of reduced aggregate claims and possibly reflecting reduced lending appetite from commercial institutions.

Following the April decline, total claims rebounded strongly in May, rising by 14.74 per cent to N4.04tn, and peaked again in June at N4.29tn. Claims remained relatively stable through the rest of the year, staying above N4tn from July to December.

On a year-on-year basis, significant increases were recorded across most months. February saw a 12.96 per cent increase compared to February 2023, while March rose by 11 per cent year-on-year. The most notable year-on-year increase occurred in June, with claims up by N1.01tn, or 30.65 per cent, compared to June 2023.

By December 2024, total claims stood at N4.09tn, compared to N4.20tn in December 2023, representing a slight year-on-year decline. The data also shows that non-interest banks contributed marginally to subnational claims, with a steady amount of N4.03m until August, after which it dropped slightly to N3.77m in December.

The gradual rise in the CBN’s share suggests growing reliance on the apex bank by state governments, especially in months when commercial banks appeared to tighten credit.


Conversely, the retreat of commercial banks, which started the year with N2.73tn in claims and ended with N2.41tn, may reflect increased risk sensitivity or tighter regulatory conditions in the banking sector. The slight easing of debt levels came in the context of a year marked by soaring inflation and aggressive monetary tightening by the Central Bank.



Experts react

The Director and Chief Economist at Proshare Nigeria LLC, Teslim Shitta-Bey, warned that the rising debt burden on Nigeria’s subnational governments could challenge their fiscal stability in the coming years.

He stressed that most state governments, along with the Federal Government, had failed to effectively manage their balance sheets.

High interest rates crippling local manufacturers – Cutix CEO, Odunoye
Speaking to Sunday PUNCH, Shitta-Bey said, “The challenge here is that most of the governments, including the Federal Government, are unable to manage their balance sheets properly. While borrowing might seem like an easy way to run operations, it is not necessarily the right approach.”

According to Shitta-Bey, borrowing should not be the default solution for governments.

“Governments could consider longer-term debt structures that resemble equity, which might actually be more beneficial in the long run,” he explained.

He also called for a comprehensive of national assets to help states raise capital.

He used the example of the National Stadium, which had not been used for major activities for a while.

Shitta-Bey lamented the underuse of state revenue bonds, which were originally designed to generate revenue. “States need to focus on raising revenue bonds, instead of general obligation bonds,” he said.

On his part, a Lagos-based economist, Adewale Abimbola, attributed the persistent fiscal fragility of Nigerian states to their economic non-viability and overreliance on federal allocations.

According to Abimbola, most states are not economically viable and depend heavily on disbursements from the Federation Allocation Committee for survival.

He noted that state governments, particularly the less vibrant ones, must begin to examine themselves inwardly to identify sectors in which they possess competitive advantages.

“Once that is mapped out,” he said, “they need to communicate and amplify these opportunities to both the local private sector and foreign investors.”

Abimbola also stressed the importance of improving the ease of doing business, saying that states should adopt ive policies and avoid stifling regulations, which often deter investment.

“The thing is, state governors know what to do. They know what to do,” he remarked pointedly. “But what’s lacking is the political will to pursue them.”

He expressed concern that this governance gap had worsened in 2025, as many political actors are now more focused on the 2027 elections than on addressing governance and development priorities.

A macroeconomic analyst, Dayo Adenubi, also emphasised the need for states to take more targeted steps toward boosting internally generated revenue as they grapple with rising debt obligations and constrained federal transfers.

According to Adenubi, one key strategy is to raise consumption levels in order to increase Value Added Tax collections.

He also stressed the importance of improving tax collection within state corridors, especially by enforcing taxes such as property taxes and transport-related levies, while ensuring that governments deliver on the social contract to maintain citizen trust and compliance.

Also, Adenubi highlighted the role of economic policy at the subnational level, stating that enhancing the ease of doing business within states could encourage corporate growth and job creation.

This, in turn, would lead to higher Pay-As-You-Earn tax remittances, helping to stabilise state revenues and reduce dependence on borrowing, he said.

https://punchng.com/experts-warn-as-states-lgs-bank-debts-hit-n4tn/

The three levels of government in Nigeria are neck deep in debt, despite proceeds from fuel subsidy removal and multiple taxes imposed on the masses.

The various states receive monthly federal allocations plus their internally generated revenue and derivation funds given to the oil producing states.

Nigerians should stop being critical only to the federal government, they should look inward,the states and local government are part of the problems in the country

Cashless policy 😂

Breakdown

Campaign fund will Tru lg to local people

This generation!

Hmmm

Inside the 4trillion, 3 trillion na for 2027 elections. Cursed nation

With the surplus money from the subsidy bouying their money and resources, no investment in capital assets and infrastructure, why should they owe money?
It is the government of looting, and unfortunately, the democracy we have is for politicians and to benefit the people.

Very sad.

I thought they said these states are now well paid so they already reducing their debt burden. APC is full of lies

I thought they said these states are now well paid so they already reducing their debt burden. APC is full of lies.
This onces get hear to listen to experts?

Celestialsword:
https://punchng.com/experts-warn-as-states-lgs-bank-debts-hit-n4tn/

So what is the rumour about increasing allocation to the states from the federation due to subsidy removal and devaluation of the naira?

Is it true that the hyperinflation has wiped out the nominal increase in federal allocation

I thought they said these states are now well paid so they already reducing their debt burden. APC is full of lies.
This onces get hear to listen to experts?
APC is a scam.

I thought they said these states are now well paid so they already reducing their debt burden. APC is full of lies.
This onces get hear to listen to experts?
APC is a scam.
Return bag of rice to ₦6, 500

Celestialsword:


The there levels of government in Nigeria are neck deep in debt, despite proceeds from fuel subsidy removal and multiple taxes imposed on the masses.

The various states receive monthly federal allocations plus their internally generated revenue and derivation funds given to the oil producing states.

Nigerians should stop being critical only to the federal government, they should look inward,the states and local government are part of the problems in the country

Very true and on point. However, no matter the critics on the other tier of government, the bulk and mover of change will come from the federal government. Knowing how powerful and influential the president and commander in chief of arm forces, we will make a better stride if the man at the very top is upright, ...not what we have now. The least of us, is lording over us.

Celestialsword:


The there levels of government in Nigeria are neck deep in debt, despite proceeds from fuel subsidy removal and multiple taxes imposed on the masses.

The various states receive monthly federal allocations plus their internally generated revenue and derivation funds given to the oil producing states.

Nigerians should stop being critical only to the federal government, they should look inward,the states and local government are part of the problems in the country

Restructuring will make governance at all levels more able and monthly allocations reduced. With this type of fake Federalism being practiced, the federal government ultimately takes the blame. Strong institutions, amendment to constitution that better empower states and local government will hold them able.

Question now is, will corruption and greed allow us to do the needful? Shameful where power is so much concentrated at the center. Our type of democracy is simply not working, made worse by bad leaders being at the helm of power

Kaa4:
With the surplus money from the subsidy bouying their money and resources, no investment in capital assets and infrastructure, why should they owe money?
It is the government of looting, and unfortunately, the democracy we have is for politicians and to benefit the people.

Very sad.

How can democracy benefit people who are not involved and who are not invested in the political and governance processes?

Can anyone reap what they did not sow

anonimi:
“The worst illiterate is the political illiterate, he doesn’t hear, doesn’t speak, nor participates in the political events.

He doesn’t know the cost of life, the price of the bean, of the fish, of the flour, of the rent, of the shoes and of the medicine, all depends on political decisions. The political illiterate is so stupid that he is proud and swells his chest saying that he hates politics.

The slowpoke doesn’t know that, from his political ignorance is born the prostitute, the abandoned child, and the worst thieves of all, the bad politician, corrupted and flunky of the national and multinational companies.”

― Bertolt Brecht

Almost all the states are in far better financial position Than FG... So what exactly is the problem

Celestialsword:


The there levels of government in Nigeria are neck deep in debt, despite proceeds from fuel subsidy removal and multiple taxes imposed on the masses.

The various states receive monthly federal allocations plus their internally generated revenue and derivation funds given to the oil producing states.

Nigerians should stop being critical only to the federal government, they should look inward,the states and local government are part of the problems in the country

South Africa that has small population has 7 times the debt of Nigeria.
Stop debt this,debt of that.All nations borrow money.
It is what they use it for that is the koko.
Tinubu is even doing more than the debt he is taking.
He has even paid more debt than what he borrowed.

Enforcing taxes such as property taxes and transport-related levies

Agbádorianss, una papa. APC will finish us kpata kpata😥

How is the debt mounting.. I thought all governors said they are not borrowing..

Make una dey deceive una selves

atobs4real:
I thought they said these states are now well paid so they already reducing their debt burden. APC is full of lies

e weak me o

Celestialsword:


https://punchng.com/experts-warn-as-states-lgs-bank-debts-hit-n4tn/

What are they doing with this money?

Celestialsword:


https://punchng.com/experts-warn-as-states-lgs-bank-debts-hit-n4tn/

Governing anywhere in Nigeria – be it federal, state or LG – is simple. Do anything (borrow, steal, kill, burn people's houses) to get into office. Then borrow 50 billion (or any billions you like). Use 10 billion out of it to fix an important road and a couple of schools, and people will start singing your praises. Pocket the 40 billion for yourself and use some of it to settle your foot soldiers. Go home. Nobody will ask any questions.

Resource curse

Dutch disease

Manufactured goods and services

They borrow money to steal. If these monies actually translates to assets on ground, there'll be no need for panic. 90% of these state Governors both past and present are evil.

This is a timely and important message. States must stop waiting on federal allocations and start harnessing their unique strengths. The truth is, the solutions are clear competitive advantage mapping, ease of doing business, and efficient tax systems. What’s missing is the will to act. Governance should be about service, not politics, and until state leaders prioritize development over elections, progress will remain slow. It's time for real action, not recycled promises.

Hehe u have a corrupt apc govt and u are saying their shouldn't be debt? Sebi una say the debit is for infrastructure

I am not even against borrowing if the the achievements are directly impacting the citizens. China has a massive debt and you can see what they have achieved in last two decades.

Take Lagos state for example, Massive debt and huge IGR but nothing to show for it. Not ONE world class university, hospital, school or road network justifies the amount of debt the state has incurred.

….and you still find Lagosians clapping for the present and past failures they have elected as Governors.

Excluding His Excellency, President Asiwaju Bola Ahmed Tinubu (GCFR) and Fashola, the rest have been OUTSTANDING failures!

A Portable would still have done better than the current governor of the Lagos state. But Lagosians are just wired to vote for the dullest among candidates.

𝗚𝗘𝗡𝗘𝗥𝗔𝗟, 𝗡𝗜𝗚𝗘𝗥𝗜𝗔 𝗜𝗦 𝗪𝗢𝗥𝗦𝗘 𝗧𝗛𝗔𝗡 𝗬𝗢𝗨 𝗟𝗘𝗙𝗧 𝗜𝗧.
.
General Sani Abacha died on this day — June 8, 1998.

The day you left, the West — America, Britain, and their Nigerian agents — rejoiced.
They popped champagne and sold Nigerians a bold lie:
“Abacha is the problem. Remove him, and paradise will follow.”

But 27 years later, the truth is staring us in the face:
Abacha wasn’t the problem — Abacha was the shield.

Under your watch:
A mudu of rice was affordable.
A dorica of rice or beans was N45.
A loaf of bread was N20 — and it could fill you.
Even N5 had meaning and dignity.
Today? N5 is a joke, an insult, a symbol of failure.
Under your watch dollar was #22 to a dollar.

The naira didn’t collapse — leadership did.
You cut taxes and protected the poor.
They taxed everything that breathes and gave the people nothing.
You said NO to the IMF.
They said YES, and sold Nigeria for cents on the dollar and collected commissions.

Today, insecurity is our daily bread.

Over 7 million Nigerians sleep in IDP camps.

Over 5,000 villages have fallen to terrorists.

Kidnapings is d order of the day.
With mounting foreign & domestic debt through borrowing with nothing to show for it

#4trn? That's too much