The federal government took approximately N78 billion from state appropriations for foreign debt payment. According to statistics from the National Bureau of Statistics’ Federation Account Allocation Committee Disbursement reports. The reductions were made in 2022 from the Federation Account allocations to state governments.
The federation account is now maintained within a legislative framework that permits money to be distributed through three key components: statutory allocation, VAT distribution, and the derivation principle.
Lagos was the worst impacted by the deductions, with over N23.61 billion withheld in 2022 for foreign debt payment. It was followed by Kaduna, which had N10.25 billion removed, and Cross River, which had N7.56 billion deducted.
Oyo, Rivers, Ogun, and Edo were deducted N4.27bn, N2.74bn, N2.62bn, and N2.15bn, respectively. Borno (N309.79m), Delta (417.54m), and Zamfara were the least hit states (417.96m).
Except for January and February, the total amount deducted was mostly constant throughout the year.
While approximately N7.66 billion was deducted in each of January and February, over N6.3 billion was deducted in each of the remaining months of the year.
Domestic debt due by state governments and the administration of the Federal Capital Territory increased to N5.33 trillion at the end of December 2022. The sub-national domestic debt stock was N4.46 trillion at the end of 2021, an increase of N870 billion in a year.
The data from the Debt Management Office indicated that Lagos State recorded the highest domestic debt as of the end of Q4 2022 with N807.21bn; this was followed by Delta State with N304.25bn and Ogun State with N270.45bn.
On the other hand, the lowest debt was recorded by Jigawa State with N43.95bn, followed by Kebbi State and Katsina State with N61.31bn and N62.37bn, respectively.
