64% surge: 23 Nigerian states increase foreign loans

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36 states and FCT hold N1.72tn outstanding budget loan to FG
36 states and FCT hold N1.72tn outstanding budget loan to FG

Despite the continuous depreciation of the Nigerian naira, 23 Nigerian states have seen a significant increase of 64.26% in their bilateral loans, reaching a total of $462.81 million by the end of June.

These loans have primarily been sourced from countries such as China, India, France, and others.

Foreign debt soars

This surge in bilateral borrowing reflects a growing appetite among state governors for this type of financing.

France’s Agence Francaise Development (AFD) held a significant portion of these loans, with debts owed to France growing by 21.84% to $306.32 million as of June 2023.

Loans from China, India, and other sources also witnessed substantial growth, increasing by 415.79% to $156.49 million during the same period.

The depreciation of the naira has made dollar-denominated loans more expensive for these states.