States across the country owe contractors and retirees a combined N1.06tn in outstanding obligations despite receiving record revenue inflows in 2024, according to new data from BudgIT’s 2025 State of States report.
The organisation found that contractor arrears amounted to N434.87bn, while pension and gratuity arrears stood at N626.81bn, bringing total unpaid obligations to N1.06tn.
The figures underline persistent fiscal stress at the subnational level, even in a year when federal allocations more than doubled and many states reported higher internal revenues.
A total of 30 states reported owing either contractors or retirees in the 2024 fiscal year, based on the BudgIT report. Twenty-six states recorded contractor arrears, while 27 states owed pension and gratuity arrears to retirees.
Only three states, Borno, Kano, and Nasarawa, reported zero liabilities in both categories, making them the only states without outstanding obligations to contractors or retirees in 2024.
According to an analysis of the data, Kaduna State is the largest debtor to contractors and retirees in 2024, owing a combined N139.36bn. The state reported contractor arrears of N56.07bn and pension and gratuity arrears of N83.29bn, the highest pension backlog in the country.
