Nigeria’s governors are plunging their states into unsustainable debt, borrowing recklessly while failing to deliver tangible benefits to the people. Instead of investing in education, healthcare, and infrastructure, many governors misuse funds on luxury vehicles, extravagant projects, and white elephant schemes that have no real economic value.
A Growing Debt Crisis
Despite heavy reliance on federal allocations and weak internally generated revenue (IGR), states continue to pile up debt with little accountability. As a result, many states are now struggling to pay workers’ salaries, pensions, and contractors.
For example, Niger State Governor Mohammed Bago admitted to a miscalculation after securing a ₦1 trillion loan for infrastructure projects. As of Q3 2024, Niger State already owed ₦144 billion in domestic debt and $75.6 million in external debt.
By September 2024, Nigeria’s total public debt had soared to ₦142.3 trillion, with debt servicing payments increasing by 69% in the first half of 2024. States accounted for 19.98% of total domestic debt and 11% of external debt.
Top Indebted States
Lagos: ₦833.4 billion (Domestic) / $1.2 billion (External)
Rivers: ₦389.2 billion (Domestic) / $203.8 million (External)
Delta: ₦342 billion (Domestic)
Kaduna: $640.6 million (External)
Edo: $380.9 million (External)
Cross River: $210.9 million (External)
Despite these massive debts, most states lack the revenue to sustain them. The National Bureau of Statistics reported that in 2023, the 36 states and FCT generated ₦2.43 trillion in IGR, a 26.03% increase from 2022. However, 18 states that failed to attract foreign investment between 2021 and 2023 now owe more than their total IGR in that period.
Poor Governance and Wasted Resources
Instead of prioritizing essential services, many governors indulge in extravagance:
Public schools are deteriorating, with students sitting on the floor due to lack of infrastructure.
Healthcare budgets remain inadequate, with 34 states and the FCT failing to access a ₦263 billion education grant in 2024.
Governors purchase luxury vehicles, build personal mansions, and approve outrageous severance packages.
Massive funds are wasted on vanity projects, such as Rivers State’s $400 million unfinished monorail project.
Meanwhile, basic amenities like potable water, electricity, and good roads remain unavailable in rural areas.
Reckless Borrowing and Debt Servicing
Many states are borrowing beyond their means. Between January and June 2024, the 36 states spent ₦139.9 billion on external debt servicing, a 122% increase from 2023.
Lagos: ₦32.44 billion spent on debt servicing
Kaduna: ₦23 billion spent on debt servicing
Despite these alarming trends, governors continue borrowing, while banks lend recklessly, confident that repayments will be deducted from federal allocations.
Need for Fiscal Responsibility
Some governors have demonstrated financial discipline:
Anambra’s Chukwuma Soludo refused a ₦438 billion World Bank loan, calling it a bad deal.
Abia’s Alex Otti repaid ₦90 billion of the state’s ₦191 billion debt without taking on new loans.
Nigeria must enforce stricter borrowing conditions to ensure that loans are used for critical infrastructure rather than wasteful projects.
Call for Accountability
Governors must publish detailed financial records to show how public funds are spent.
State legislatures must provide oversight and resist corruption.
The Federal Government and financial institutions must enforce responsible borrowing practices.
Nigerians must demand better leadership and stop electing politicians who mismanage funds.
Debt is not inherently bad, but reckless borrowing without accountability or economic benefits is a disaster. The time for fiscal responsibility is now.
