External Debt: FG Deducts N78bn From States Allocations For Servicing

The Federal Government deducted over N78bn from allocations made to the states for external debt servicing.

This was according to data from the Federation Account Allocation Committee (FAAC) Disbursement reports published by the National Bureau of Statistics (NBS).

The deductions were made in 2022 from the allocations given to state governments from the Federation Account.

The federation account is currently being managed under a legal framework that allows funds to be shared under three major components: statutory allocation, Value Added Tax distribution and derivation principle.

Our correspondent observed that the most hit state by the deductions was Lagos, with about N23.61bn deducted in 2022 for external debt servicing.

It was followed by Kaduna with N10.25bn deducted, and Cross River with N7.56bn deducted.

About N4.27bn, N2.74bn, N2.62bn and N2.15bn were deducted from Oyo, Rivers, Ogun and Edo respectively.

The least affected states were Borno (N309.79m), Delta (417.54m) and Zamfara (417.96m).

Economic Confidential noted that the total amount deducted was mostly fixed throughout the year except for January and February.

While about N7.66bn was deducted each in January and February, over N6.3bn was deducted each for the remaining months of the year.

Economic Confidential earlier reported that domestic debt owed by state governments and the Federal Capital Territory administration rose to N5.33tn as of the end of December 2022.

The sub-national domestic debt stock was N4.46tn by the end of 2021, which means it rose by N870bn within one 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.