According to KINGMAKERS (kingmakers.com.ng) ‘The debt-to-GDP ratio is the ratio between region’s government debt (a cumulative amount) and its gross domestic product (GDP). It measures the financial leverage of an economy, in other words it measures how the use of borrowed funds in the purchase of an asset, with the expectation that the income from the asset and asset price appreciation will exceed the borrowing cost.
A low debt-to-GDP ratio indicates an economy that produces and sells goods and services sufficient to pay back debts without incurring further debt. Geopolitical and economic considerations – including interest rates, war, recessions, and other variables – influence the borrowing practices of a nation and the choice to incur further debt.’
Lagos state has the highest GDP of about $28bn with a debt of about $3bn. This is 1 of the highest debt to GDP ratio in the country of about 10.9% (according to kingmakers.com).
This is below the world standard of below 60% and the current indices show the states ability to pay this debt conveniently. The only other state that has a ratio higher than that of Lagos State is Bayelsa and Ekiti State with a ratio of 11.2% and 16.8%. You can find the full list by clicking here. Or go to https://stateofstates.kingmakers.com.ng.
I was on High impact Radio 102.1FM discussing this challenge. Do take a listen for more insights. https://youtu.be/hEyUzy_lT1g?si=k9GW4r3lXg9nmkzY. Comments are welcomed.
