20 Govs Borrow ₦458 Billion In Six Months Despite Rising FAAC Allocations

A report has indicated that no fewer than 20 state governors have borrowed ₦458 billion in the first half of 2025.

According to the report by Punch, the states spent about ₦235.58bn on servicing external debt within the period, representing a sharp rise of ₦95.65bn or 68.4 per cent when compared with the ₦139.92bn recorded in the corresponding half of 2024.

This comes against the backdrop of a soaring external debt servicing burden gripping state governments.

According to experts, the surge underscores the mounting pressure of dollar-denominated debt repayments on state finances in the wake of the naira’s depreciation.

An analysis of the Federal Account Allocation Committee (FAAC) disbursement data released by the National Bureau of Statistics shows that a total of ₦10.13 trillion, including statutory revenue, Value Added Tax, Electronic Money Transfer Levy and Exchange Rate Difference, was shared among the three tiers of government in the first half of this year.

Out of this, the states received ₦3.425tn, a 42.96 per cent increase from the N2.396tn they got in the first six months of 2024.

In H1 2024, the states received ₦379bn in January, ₦366.9bn in February, ₦396.8bn in March, ₦403bn in April, ₦388.4bn in May, and ₦461.97bn in June.

But in the same period this year, allocations surged to ₦590.6bn in January, ₦562.19bn in February, ₦530.45bn in March, ₦556.74bn in April, ₦577.84bn in May, and ₦607bn in June.

Despite the higher inflows, an analysis of states’ Q2 budget implementation reports showed that about 20 of them still resorted to fresh borrowings, both foreign and domestic, amounting to ₦457.66bn in the first half of 2025.

Leading the pack is Oyo State, which took a ₦93.4bn domestic loan, followed by Kaduna and Lagos, which took ₦62bn (foreign) and N50bn (domestic) loans, respectively.

States that took foreign loans include Gombe (₦20.3bn), Zamfara (₦28bn), Katsina (₦20.7bn), Kebbi (₦7.4bn) and Jigawa (₦10.98bn).

While Bauchi took both domestic and foreign loans totalling ₦26.3bn, Borno, Taraba, Sokoto, Niger, Kwara, and Ekiti borrowed ₦18.2bn, ₦18.7bn, ₦15bn, ₦25.8bn, ₦2.18bn and ₦19.8bn respectively in foreign loans.

The foreign loan list also includes Ondo (₦5.6bn), Abia (₦7bn), Ebonyi (₦10.9bn) and Enugu (₦10.7bn).

Source: Naijanews