Six provincial governments in Argentina say they are owed more than U$9.37 billion from the national government in unpaid debts, according to a report by Perfil.
Five of the regional administrations – the provinces of Buenos Aires, La Pampa, La Rioja, Formosa and Santiago del Estero – are controlled by parties in opposition to President Javier Milei’s national government. The sixth, Santa Fe Province, is on better terms, but is facing difficulties in negotiations.
If additional claims from the provinces of Córdoba, Entre Ríos and the Autonomous City of Buenos Aires are included, outstanding debts total US$16.258 billion, according to Perfil’s calculations.
It should be noted that the Milei government does not acknowledge all these amounts. Argentina’s Economy Ministry has made progress in negotiations with some provinces that are more aligned within the framework of the Régimen de Extinción de Obligaciones Recíprocas (“Reciprocal Obligations Extinction Scheme,” Presidential Decree No. 969/24), which was published in the Official Gazette in November last year.
Buenos Aires Province is demanding 7.8 trillion pesos from the central government, according to data compiled by the provincial government as of November 2024. At the latest official exchange rate of 1,133.5 pesos per US dollar, this sum equals nearly US$7 billion.
Around five trillion pesos of that corresponds to national public works that have been halted in the province governed by Axel Kicillof. An additional two trillion pesos corresponds to direct liabilities, such as transfers from ANSES social security agency to the Buenos Aires Province pension scheme, as well as various funds for education, transport, and healthcare. Debt stemming from discontinued or delayed social programmes totals 371.163 billion pesos, according to Kicillof’s administration.
Meanwhile, Buenos Aires City claims that Argentina’s Treasury owes it US$6 billion as a refund from funds cut from federal revenue-sharing (coparticipación) payments between September 2020 and the agreement it reached with the national government in September last year. Meanwhile, the Supreme Court decided to increase the share of the pot that Buenos Aires City receives. Although the capital now receives a higher amount of funds, City Hall continues to demand the unpaid balance accrued over the preceding four-year period.
As for Santa Fe, the province has not joined the national government’s “reciprocal” compensation scheme. It is demanding about debt totalling 1.1 trillion pesos – approximately US$970 million at the wholesale dollar rate – from three main sources: NSES contributions to cover the provincial pension fund deficit’ funding for the construction of Ruta Nacional 19 and costs for housing federal prisoners in provincial prisons.
Santa Fe Governor Maximiliano Pullaro last week attended the AmCham 2025 Summit in Buenos Aires. Quizzed about the relationship with the Casa Rosada, he said: “The relationship is good. The national government owes Santa Fe a lot and it’s very difficult to agree on how to address that. The pension fund debt stems from taxes (impuestos coparticipables) that Santa Fe gave up to support ANSES and the national government was meant to help cover part of the fiscal deficit of provincial pension schemes.”
Officials in Santiago del Estero told Perfil that the province “did not join the debt regularisation scheme because it has no claimable debt.” However, it is still requesting payment of a debt of 43.148 billion pesos (around US$38 million) from the national government in relation to the Fondo Fiduciario para Desarrollo Provincial, which the regional government claims was requested properly and on time but not disbursed.
La Pampa’s claim against the national government totals 402 billion pesos, approximately US$354.6 million, as confirmed by provincial Economy Minister Guido Bisterfeld and officials at the regional Finance Ministry. Regarding negotiations with the national government, provincial officials say Governor Serio Ziliotto – one of the few who joined the compensation scheme – said there had been “no progress, not even in analysing a payment schedule.” They added: “We’ve made no progress at all, apart from certifying the total amount owed to us.”
La Rioja is demanding US$864 million in federal revenue-sharing funds, covering a period spanning October 2023 to March 2025. The province, governed by Ricardo Quintela, has not joined the compensation scheme. Officials there said: “When the current president took office, payments were already owed since October 2023. The calculation is based on each month's real revenue-sharing percentage, converted to US dollars at the exchange rate at the time and then updated to March 2025 values.”
On May 14, Córdoba reached an agreement with the national government acknowledging a debt with the provincial pension fund and an agreement to pay 60 billion pesos in 12 equal monthly instalments of five billion pesos each, starting in May 2025 and ending in April 2026. This debt is to be charged to the 2025 fiscal year.
Regarding remaining debt dating from 2020 to 2024 (estimated at around one trillion pesos), officials at Córdoba’s Finance Ministry Explained that it is subject to a final assessment from ANSES and the province’s approval. That amount is roughly equivalent to US$900 million.
Entre Ríos was one of the few provinces to make progress under the Régimen de Extinción de Obligaciones Recíprocas. The province and national governments offset mutual debts, resulting in a final balance of 238.7 million pesos in favour of Governor Rogelio Frigerio and his administration. The agreement still needs to be ratified by the courts.
This week, the head of Formosa’s Provincial Tax Authority (ATP), Gustavo López Peña, noted that the regional government has been receiving less funds from the national government. “For example, we are owed over 170 billion pesos for pensions, which the province is currently covering. We will continue working to have this debt recognised and settled,” he said. This amount would be equivalent to around US$150 million.
Demand for public works
Between 2019 and 2023, Argentina’s national government undertook 7,265 public works projects across 23 provinces and the capital, Buenos Aires City. As of December 10, 2023, 4,434 had been completed, while 2,308 under construction were halted by the Milei administration. A further 523 projects were about to start and 615 were undergoing evaluation and had guaranteed financing — all of which were also put on hold.
This data comes from a report compiled by the Buenos Aires Province Infrastructure Ministry to mark Milei’s first 500 days in office.
Reactivating these projects is a key demand from regional governments. Some, like Buenos Aires Province, are now asking the national administration to grant them the rights to complete these projects using provincial funds.
In contrast with increased investment in public works under the previous administration – which executed 97.5 percent of the budget allocated to the works, the Milei administration is pursuing a fierce austerity campaign focused particularly on slashing infrastructure spending, and prioritising short-term deficit reduction over development. Capital expenditure on public works projects dropped 77 percent year-on-year in real terms during 2024. This was accompanied by an 80 percent reduction in transfers to provinces and an 18 percent cut in social benefits.
Nationwide, more than 1,270 road construction projects have been suspended – in 2024, investment from the National Highway Directorate fell 72 percent compared to 2023.
Based on spending during the first months of 2025, projections suggest this year's cut will be even deeper, totalling 78 percent.
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