Bayelsa, Kogi five other states expend  190% of revenue on loan servicing

Seven states spent an average of 190 per cent of their Internally Generated Revenue on debt  repayment  in the first quarter of 2025, a  reality that has plagued the states, depicting the worsening fiscal challenge  facing subnational governments.

Data from the Q1 2025 Budget Implementation Reports of Bayelsa, Adamawa, Benue, Niger, Kogi, Taraba, and Bauchi states  reveal  that debt service expenditure in each of the states was more than their IGR, in some cases by more than 300 per cent.

The development , when compared with figures from the preceding quarter (Q4 2024), also  highlights  a  steep  quarter-on-quarter uptick in debt service cost, which rose by approximately 51 per cent across the states reviewed.

It was discovered that seven Nigerian states  expended  a total of N98.71bn on debt servicing in Q1 2025, marking a sharp increase of N33.48bn or 51 per cent compared to the N65.24bn recorded in the previous quarter.

The data further showed that the combined IGR for the seven states rose modestly from N44.05bn in Q4 2024 to N51.92bn in Q1 2025, indicating an increase of N7.87bn. However, this marginal revenue improvement was outpaced by a surge in debt repayment obligations, highlighting the widening fiscal gap at the subnational level.

Disbursements from the Federation Account Allocation Committee to the affected states increased from N360.75bn in Q4 2024 to N419.86bn in Q1 2025, representing a rise of N59.11bn within three months. The increase shows the continued dependence of states on federal transfers to meet not only operational costs but also mounting debt obligations.