"State Governments and FCT Owe FG N1.7tn in Budget Support Loans"
At the 140th National Economic Council meeting presided over by Vice President Kashim Shettima, it was disclosed that the 36 state governments and the Federal Capital Territory (FCT) collectively owe the Federal Government a staggering N1.72 trillion in outstanding liabilities from budget support facilities.
This revelation underscores the significant financial strain faced by state governments across Nigeria, as they struggle to meet their financial obligations amidst economic challenges. The financing facility, approved by the Muhammadu Buhari administration in 2021, was intended to assist states in addressing their financial needs and ensuring the smooth running of essential services.
According to the breakdown provided, the FCT is accountable for N49.11 billion of the total debt, while each of the 36 states bears an equivalent burden, resulting in the cumulative debt of N1.72 trillion. This substantial debt highlights the urgent need for effective fiscal management and revenue generation strategies at both the federal and state levels.
Furthermore, it was noted that the Federal Government ceased providing budget support loans in July 2023, partly in response to an improvement in the country's revenue generation capacity. This decision reflects a shift in policy priorities towards sustainable fiscal management and reducing dependence on external financial support.
The revelation of the outstanding debt underscores the importance of fiscal discipline and accountability in managing state finances. It also emphasizes the need for collaborative efforts between the federal and state governments to address fiscal challenges and ensure the sustainable development of the Nigerian economy.
