There is some evidence that growing debts owed to entrepreneurs by Nigerian states threaten development projects at subnational levels of government.

The findings showed that with billions of naira in unpaid obligations, critical projects across the country remain stalled, exacerbating infrastructure deficits and eroding public confidence. BudgIT data revealed that over 25 states owe contractors significant sums totaling over N410 billion in 2023, highlighting the widespread fiscal pressure on development efforts.

Available data gleaned by BudgIT from the National Bureau of Statistics (NBS) showed that Delta State tops the list of indebted states with N76.26 billion owed to contractors, followed by IMO (43 .47 billion naira), Cross River (39.12 billion naira). ), and Kano (37.04 billion Naira).

Akwa Ibom with N31.07 billion, Anambra N24.26 billion and Gombe N23.74 billion are also among the top debtors.

Others are: Adamawa (N19.17 billion), Plateau (N14.96 billion), Benue (N13.02 billion), Kebbi (N11.27 billion), Zamfara (10.7 billion of naira) Bauchi (N10.69 billion), Osun (N10.04 billion), Kaduna (N8.97 billion) Kwara (N7.81 billion) Enugu (N7.43 billion) , Sokoto (N6.33 billion) Borno (N4.08 billion), Oyo (N2.78 billion), Ekiti (N2.32 billion), Katsina (N2.08 billion), Niger (1.08 billion naira) Jigawa (0.98 billion naira) ) Kogi (0.47 billion naira), Taraba (0.23 billion naira), Ebonyi (0.20249 billion naira).

Conversely, states like Lagos, Rivers, Bayelsa, Abia, Edo and Yobe reported no entrepreneurial debt, demonstrating stronger fiscal discipline and sound financial management.

The South-South region bears the heaviest contractor debt burden, due to significant arrears in Delta, Cross River and Akwa Ibom states. In the North-East, Gombe and Adamawa are the main contributors to the region’s liabilities, while Kano comes first in the North-West.

In contrast, most states in the South-West region, including Lagos, Ogun and Ondo, have declared zero debt, which has been recognized for their financial prudence.

The implications of these debts are considerable. Contractors unable to obtain payments on time have been forced to abandon projects or scale back operations, delaying infrastructure development and disrupting essential services.

Analysts say this stagnation is having knock-on effects, including reduced employment opportunities, weakened household purchasing power and reduced public confidence in governance.

The International Monetary Fund (IMF) has expressed concern about the impact of these fiscal challenges on development spending. It warns that “this environment of limited financing and high debt servicing is already having a significant impact on the resources available for development spending.” High debt servicing costs, coupled with limited financing options, leave states with little room to invest in critical sectors, perpetuating cycles of underperformance and public dissatisfaction.

Experts say resolving entrepreneur debt requires a multi-faceted approach. Dr. Muda Yusuf, CEO of the Center for the Promotion of Private Enterprise, stressed the need for fiscal discipline, while “states must observe fiscal discipline to deal with this crisis. Collaboration with the private sector through public-private partnerships (PPPs) can provide alternative financing for infrastructure projects.

Others also advocate federal intervention to stabilize debt-ridden states and prevent further escalation of contractor liabilities.

Increased transparency in budgeting and innovative financing solutions are also essential. States must prioritize the clearance of unpaid debts to contractors in order to restore confidence and ensure project continuity. Adopting sustainable budgeting practices, combined with strategic planning, can help alleviate the challenges posed by these debts.

Although some states, such as those in the Southwest, demonstrate models of fiscal responsibility, the overall fiscal landscape remains concerning. The IMF statement highlights the urgency of resolving these issues to unlock Nigeria’s development potential. Without rapid action, project delays and dwindling resources will continue to harm economic growth and citizen well-being.

The stakes are high, but with a commitment to fiscal discipline, strategic resource allocation and innovative partnerships, Nigeria can overcome these challenges. By prioritizing contractor payments and addressing structural inefficiencies, governments can pave the way for sustainable development and restore trust in governance.

Debt to entrepreneurs by state – 2023

1 Delta: 76.26 billion Naira

2 IMO – 43.47 billion naira

3 Cross River – N39.12 billion

4 Kano—37.04 billion naira

5 Akwa Ibom – 31.07 billion naira

6 Anambra—24.26 billion naira

7 Gombe—23.74 billion Naira

8 Adamawa – N19.17 billion

9 Plateau – 14.96 billion Naira

10 Benue: 13.02 billion naira

11 Kebbi – 11.27 billion naira

12 Zamfara – 10.7 billion Naira

13 Bauchi—N10.69 billion

14 Osun – 10.04 billion naira

15 Kaduna – 8.97 billion naira

16 Kwara – 7.81 billion naira

17 Enugu—N7.43 billion

18 Sokoto—6.33 billion Naira

19 Borno—4.08 billion Naira

20 Oyo – 2.78 billion naira

21 Ekiti—2.32 billion Naira

22 Katsina – 2.08 billion naira

23 Niger – 1.08 billion Naira

24 Jigawa—0.98 billion Naira

25 Kogi—0.47 billion Naira

26 Taraba—0.23 billion Naira

27 Ebonyi—0.20249 billion naira

28 Abia — 0 billion naira

29 Edo — 0 billion naira

30 Bayelsa — 0 billion naira

31 Yobe — 0 billion naira

32 Nasarawa — 0 billion naira

33 Ondo, Ogun, Rivers, Lagos — None

NE NW SS NC SE & SW

#Statisense

(Budget)

Indebtedness to entrepreneurs and internally generated revenue by zone – 2023

Debt, 2023

1 South-South: 146.46 billion naira

2 North West: N77.37 billion

3 South East: N75.36 billion

4 North East: N57.91 billion

5 North Central – 37.34 billion Naira

6 South West – 15.14 billion Naira

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