Yinka Ogunnubi: The State of Nigerian States – An Economic Treatise

Between 2011 – 2017, the Debt Stock (External + Domestic) of States grew by an average of 190% by Geo-Political Zone.

The biggest leap came from d NW with 256% followed by d SW & NE with 242% & 241% respectively. The South – South was d lowest with 87%


Nassarawa and Plateau States recorded the highest jump in NC States. By a leap of 533% & 396% respectively. If we should factor only Domestic Debt, Nasarrawa grew their debt stock by over 1000% between 2011 – 2017.


Borno, Gombe and Bauchi are the flash points in the North East. They grew their debt stock by 923%, 420% & 264%. It’s instructive to note that the biggest part of the debt stock for Borno was secured BEFORE the Boko Haram conflict of 2014/2015.


Kano, Jigawa and Kebbi make up the big debtors in the NW with 652%, 464% & 389% respectively. Considering Domestic Debt alone, Kano increased by 1497% while Jigawa increased by 1352% between 2011 – 2017.


In the South East, Enugu & Imo States make up the high numbers with 370% & 238% respectively from 2011 – 2017. Ebonyi State is the best performer in the SE and second only to Bayelsa in the entire nation with 1% increase. It’s also note worthy that in terms of Domestic Debt, Anambra and Ebonyi achieved a reduction of 38% & 30% respectively


The South South remains the best performing in terms of % but not in terms of amount (which they rank 2nd to the South West). Akwa Ibom has the highest jump with 236% while Bayelsa’s loan actually reduced by 7% (14% reduction by Domestic Debt).


By all accounts, the SW has the biggest jump with Osun and Oyo recording 1077% and 738% respectively.

If we should consider only domestic debt, Osun State alone records an increase of 2592% while Oyo States records 2310%. Though in terms of amount, Lagos has d highest, in terms of % it comes a distant 4th in the SW after Ekiti (264%) in 3rd. When you compare these figures with % of revenue & the shortfall between recurrent exp & revenue, d weak #StateofStates becomes very obvious. Next we will analyse the IGR + FAAC for same period and see what it shows us.

We will look at the revenue figures for the States and compare them to the Debt figures. The analysis will be by GPZ. But before then, let us analyse the Debt Per Capita. i.e. the debt stock (excluding cash ) divided by the State Population. Note: I could not obtain the “Cash” figures for the States. So this analysis of the Debt per Capita is excluding Cash.

The Attached Chart shows the debt per capital of States (North & South) based on the projected population figs of 2011/2016.

yinka ogunnubi state of states debt per capita 1


The DPC of States in the North Central grew by 98% from N10,600 in 2011 to N21,000 in 2017. With the biggest from Nassarawa


DPC grew in the North East by 181% from 4,800 in 2011 to 13,500 in 2017. The biggest contributor to this is Borno State.


Debt Per Capita in the North West grew by 206% from 3,500 in 2011 to 10.700 in 2017. The biggest contributor being Kano State.


Debt Per Capita grew by 102% from 8300 in 2011 to 16800 in 2017 due mainly to the contribution of Ebonyi with its 12% reduction.


In the South South, Debt Per Capita grew by only 38% from 29,000 in 2011 to 40,000 in 2011 on the back of Bayelsa’s good performance.


Debt Per Capita grew by 193% from 10,400 in 2011 to 30,500 in 2017. Osun State recorded over 900% while Oyo State recorded over 607%.


In 2011, the top 6 debtors accounted for 50% of debt stock while in 2017, they account for only 40%. What this shows is that in later years (2016 – 2017), the debt was more broadly distributed that was the case in 2011. The Chart below shows the top 10 States with the worst debt stock ranking & the top 10 States with the best ranking. You can see clearly that Osun State moved up 24 places from 28th in 2011 to 4th in 2017. While Ebonyi State moved down by 19.

Lagos, Delta, Cross River & FCT remained in the top 6 from 2011/2017. Bayelsa & Rivers exited replaced by Osun & Akwa Ibom.


75% of Total Revenue is from FAAC. with Nassarawa State being the highest with 89%. (Highest % increase in debt).


86% of revenue is from FAAC. With Borno and Yobe State recording 93% and 91% respectively.


In the North West, 79% of revenue is from FAAC with Kebbi State and Jigawa State having the biggest percentages at 91%.


75% of revenue is from FAAC. The highest is from Ebonyi State with 92%. The highest IGR is from Anambra State with 33%.


64% of revenue in the South South is from FAAC with the highest from Bayelsa State at 88%. The highest IGR is from Rivers State at 51%.


Courtesy of Lagos State and Ogun State, South West has the lowest FAAC at 32% with IGR at 79% & 78% respectively. Highest FAAC is Ekiti State.

Note: By “Highest FAAC”, I mean highest FAAC RATE compared with IGR.

In the meanwhile, let’s compare the Debt Stock to the Total Revenue. Before then, a few words about “Debt Sustainability”. Debt Sustainability analysis is the acceptable standard of measuring the ability of a Country or State to sustain its debt.

There are mainly 3 ways of measuring Debt Sustainability:

1. Debt to GDP

2. Debt to Revenue

3. Debt Service to Revenue

The first one (Debt to GDP) is an “Output Based Indicator”. While the last two are basically “Revenue Based Indicators”. The last debt sustainability analysis for Nigeria was done for 2016 & can be downloaded on DMO site. For us to analyse debt sustainability of States by Output, we would need the GDP for States. NBS does not provide this yet.

This means we are left with using the Revenue Indicators: Debt to Revenue and Debt Service to Revenue for the analysis. I decided to go with Debt to Revenue mainly because the data required for such analysis is readily available.

A few things to note. The FG established different threshold for measuring its debt according to the different indicators. So for instance, threshold for Debt to GDP is 56% based on “Peer Grp” factoring. While Threshold for Debt to Revenue is 350%.

In other words, the debt sustainability of any State will be considered high if it is within the country specific threshold. According to the DMO, debt to revenue of FGN, States and FCT looks fairly okay because it stood at 292% (lower than 350%.)

Note: This is a combination of all the States (including FG & FCT). If FG alone is considered, the projection is 395.3%.

My analysis, therefore, focuses on showing the debt to revenue per State & specifically the States that cross d 350% threshold. The attached Chart shows the debt to revenue per State. For Northern States and for Southern States.

Among the 36 States, 5 States crossed the 350% Country Specific Threshold and they are:

Osun State

Ekiti State

Cross Rivers State

Imo State

Plateau State

Please note that for the FCT, it is inclusive as I don’t have the records of IGR. So the analysis is based mainly on FAAC. Now whether you accept this methodology is irrelevant. What’s relevant is knowing how debt sustainability for states is measured. I don’t think there has been a time in d last 3years that focus has been beamed on the #StateofStates as now.

This level of scrutiny is key. Several organisations & individuals including ProShare Nigeria and Budgit Nigeriabbare beaming their search light directly on the #StateofStates. We ought to pay attention.