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Bauchi, Niger Lead as Northern States’ Domestic Debt Hits N1.25 Trillion

The 19 northern Nigeria states have cumulatively accrued N1.25 trillion in domestic debt as of September 2024.

A review of the Debt Management Office (DMO) report released at the end of 2024 reveals that Bauchi and Niger top the chart with domestic liabilities of N145.2 billion and N144.8 billion, respectively.

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The report shows that several states are heavily indebted, raising concerns about fiscal responsibility, debt servicing, and the impact on governance. 

Northern Nigeria, a region already struggling with economic challenges, insecurity, and infrastructural deficits, now faces a domestic debt burden that takes large chunk of the states’ revenue. 

According to the report, other states with substantial domestic debts include Adamawa, Benue, and Gombe. 

In contrast, Jigawa has managed to keep its domestic debt remarkably low at just N1.26 billion, the lowest figure among all the states of the federation.

Domestic Debts Profile of the 19 Northern States

WikkiTimes has reported that Bauchi State, the top in this list has earmarked the sum of N29.8 billion for debt servicing in the recently assented 2025 budget gulping 59.72% of its internally generated revenue (IGR) of N49.9 billion projection for the year.

This medium’s review of the Capital Importation report published by the National Bureau of Statistics (NBS) for the first nine months of 2024, also noted that except Kaduna, all other 18 states attracted zero investment from outside the country.

Kaduna was the only northern state to attract foreign direct investment (FDI) to the tune of $1.95 million. 

However, Kano, Adamawa and Borno States have emerged as top contributors to the pool of Value Added Tax (VAT) in 2024.

The debt profiles among states raise questions about borrowing practices, economic management, and repayment strategies. 

While some states continue accumulating massive debts, others have maintained a cautious approach.

Where is the Money Going?

In addition the mounting debt, many states still grapple with deteriorating infrastructure, inadequate healthcare, and miniscule workers’ salaries. 

The persistent lack of development despite high borrowing levels raises concerns about the effective utilization of these funds. 

In states like Bauchi, Niger and Adamawa, erratic electricity, underfunded hospitals and poor roads remain common issues, despite their high debt burden. 

This disconnect suggests that loans may not always be used for critical projects but instead for trivial expenditures, including political appointees’ salaries and administrative costs, while others are siphoned.

Transparency remains a significant challenge, as many states fail to publish detailed records of how borrowed funds are allocated. 

Burden of Debt Servicing

In Bauchi, which has the highest domestic debt in the region, pension arrears remain unpaid, while Benue still owes workers several months of salaries despite its N115 billion debt.

As states channel more funds toward servicing their obligations, critical sectors such as education, health, and infrastructure suffer. 

The long-term consequence of this is the deterioration of public services, which worsens the quality of life for residents.

This suggests that governments must adopt greater transparency by publicly disclosing loan agreements, interest rates, and repayment plans. 

Analysts maintained that borrowing should be focused on capital projects that generate revenue, rather than on recurrent expenses. 

Additionally, anti-corruption efforts must be intensified while independent audits should be conducted to track how borrowed funds are utilized.

The debt burden of the states is a pressing concern for governance and economic sustainability. 

Without proper accountability and strategic fiscal management, the debts will continue to hinder development while increasing economic hardship for ordinary citizens.

If debt accumulation continues without corresponding development, the states risk deeper financial crises, further dwindling the economic and infrastructural sectors.

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