Omo, see as our states dey manage their money well as they don slash their borrowings by N547.52bn within one year! E be like say na good news wey dey show how the Federation Account don dey shine.

According to the latest report from the Central Bank of Nigeria wey drop for Saturday PUNCH, the banking sector no longer dey owe our state and local governments as before. The money wey dem dey owe banks come down from N2.68tn in June 2024 to N2.13tn in June 2025. This na correct reduction of 20.4 per cent year-on-year. Na wetin dem call financial discipline, no be so?

For January 2024, banks dey expose their neck to states and councils at N2.73tn. But by January 2025, e don wittle down to N2.44tn. E clear say dem don clear about N292bn within that period, abi na them dey chop less on top borrowing matter?

The month of June 2025 come waka enter history as the time when dem experience the biggest drop, from N2.45tn to N2.13tn in just one month. That one show say dem no wan carry heavy debts while interest rates dey high and FAAC allocations dey rise sharply.

The Central Bank no carry hand fold for 2024 o! Dem tighten their policy sharp sharp, increasing the Monetary Policy Rate like serious matter, from 18.75 per cent to 27.50 per cent by November, all to control inflation and make sure naira no dey waka scatter. 2025 just carry calm dey come as dem hold MPR steady around 27.50 except for one sharp cut in September wey reduce am to 27.00 per cent because inflation don dey cool down small.

Meanwhile, when we check wetin FAAC don release, e don show say state and local governments collect total N12.67tn in 2025, compared to N8.96tn in 2024. Na big surge of 41.4 per cent year-on-year! Once we add the derivation fund wey oil-producing states dey collect, e come rise to N14.28tn, meaning say states and councils receive N3.98tn more than before.

The state governments dey collect their own share fine, as dem jump from N5.19tn in 2024 to N7.31tn in 2025. Local councils sef see wetin dey happen as dem collections rise from N3.77tn to N5.35tn. Now, January 2024 give them N396.69bn, but January 2025 don step up to N498.50bn. This money matter dey climb every month like Nigerian jollof rice di sweet for party.

By the end of 2025, all FAAC allocations wey go all three tiers of government rise from N13.91tn to N20.28tn. With this kind money movement, e clear say states and councils dey see light for financial matter, but we no fit forget say dem still dey deal with heavy debt. The acting Director of Communication for NEITI, Mrs Obiageli Onuorah, don’t yarn am well say despite the cash influx, many states still dey struggle with debt repayment.

Ms Patience Oniha wey dey manage Nigeria’s Debt Management Office don tok say states make them no rely on borrowings only to fund their projects. She suggest say make them collaborate with private sectors, increase tax revenues, and no forget say PPPs fit help them reduce financial burden. Na serious time matter wey dey show say our states fit sabi manage their finances if dem apply demself well.