Debt Service Sustainability and Infrastructural Development in Kebbi State, Nigeria: An Empirical Evaluation of Public Debt-Servicing Costs Versus Infrastructural Growth (2015-2024)

Rising public debt in Nigerian sub-nationals has raised concerns over fiscal sustainability and crowding-out of infrastructural development. Kebbi State's external debt grew by 496% from N8.90bn in 2015 to N53.04bn in 2024, while debt service surged to N53.04bn in 2024, triggering sustainability concerns. The study examined the effect of public debt management on infrastructural growth in Kebbi State, Nigeria (2015-2024). Specific objectives were to: (i) examine trend of public debt and debt service, (ii) evaluate effect of debt service on infrastructural growth, and (iii) assess debt service sustainability. Ex-post facto research design was adopted. Secondary time series data were sourced from Debt Management Office (DMO) and Kebbi State Audited Financial Statements. Infrastructural growth was proxied by Capital Expenditure (CAPEX). Data were analyzed using descriptive statistics, Pearson correlation, and Ordinary Least Squares (OLS) regression via SPSS 26. Sustainability was measured using DMO 40% Debt Service-to-Revenue threshold. Mean total public debt was N72.10bn (SD=18.25), debt service N19.12bn (SD=15.71), total revenue N88.67bn, IGR N7.49bn and CAPEX N49.12bn. Debt service-to-revenue averaged 20.06% (min 7.93%, max 37.11%). Correlation result showed positive and significant relationship between debt service and CAPEX (r=0.739, p<0.05). OLS result revealed debt service has positive and statistically significant effect on infrastructural growth (β=1.492, t=3.105, p=0.014), with R²=0.547 and F=9.64 (p=0.014). The positive sign contradicts debt overhang a priori expectation but reflects project-tied multilateral borrowing where service is deducted at source. Kebbi State's debt service is sustainable on average (20.06% < 40% threshold) but 2024 ratio of 37.11% signals approaching distress. Debt service significantly drives infrastructural growth due to productive use. The study recommends enhanced IGR mobilization to reduce FAAC dependence, as debt service was 359% of IGR in 2024, and strict adherence to borrowing for capital projects only to maintain sustainability.