The Kano State Government has reported a staggering loss of N44 billion attributed to the depreciation of the Nigerian naira against foreign currencies throughout 2023. This financial setback highlights the severe impact of currency fluctuations on the state's foreign debt obligations.
The depreciation of the naira, which has seen significant declines against major currencies, has exacerbated the state's financial challenges. As of December 2023, the naira depreciated from an exchange rate of approximately ₦768 to around ₦899 per dollar, representing a decline of nearly 17% within a few months. This rapid devaluation has led to an increase in the local currency value of foreign debts, severely straining Kano State's fiscal resources.
The Kano State Debt Management Office (DMO) indicated that this loss is part of a broader trend affecting many states across Nigeria, as the total public debt has surged significantly due to currency devaluation. The DMO also reported that Kano State had serviced approximately N63.5 billion in debts incurred during previous administrations, further complicating its financial landscape.
Governor Abba Kabir Yusuf expressed deep concern over the implications of this loss on the state’s development projects and overall economic stability. "The depreciation of the naira has not only inflated our debt obligations but also threatens our ability to fund essential services and infrastructure projects," he stated.
The Kano State Government is actively seeking solutions to mitigate these effects, including exploring options for restructuring existing debts and enhancing revenue generation strategies. The administration aims to engage with financial experts and stakeholders to develop a comprehensive plan that addresses both immediate financial pressures and long-term economic sustainability.