Lagos Tops Nigeria's State Debt Ranking as Borrowing Surges Nationwide
New data released by Nigeria's Debt Management Office (DMO) has revealed a significant increase in both domestic and external debt across the country's 36 states and the Federal Capital Territory (FCT) between 2024 and 2025. The analysis shows Lagos State maintaining its position as the most indebted subnational government, with Rivers State also ranking high as Nigeria's combined public debt continues its upward trajectory.
Alarming Debt Growth Across All Segments
The DMO figures indicate that Nigeria's total external debt rose to $51.81 billion in 2025, representing an increase of approximately $6.03 billion from the $45.78 billion recorded in 2024. Federal borrowing drove much of this growth, climbing from $40.98 billion to $46.12 billion during the same period.
On the domestic front, state-level borrowing increased by about N392 billion, rising from N3.97 trillion in 2024 to N4.36 trillion in 2025. This growing debt burden continues to raise serious concerns about fiscal sustainability, as governments at both federal and state levels remain heavily reliant on borrowing to fund budget deficits and infrastructure projects.
Top States by Domestic Debt Exposure
The domestic debt ranking reveals significant increases across most states, with Lagos maintaining a dominant lead:
- Lagos State: Domestic debt rose from N900.19 billion in 2024 to N1.22 trillion in 2025, an increase of over N319 billion within one year.
- Rivers State: Increased from N364.39 billion to N378.81 billion.
- Ogun State: Rose from N211.86 billion to N227.47 billion.
- Delta State: Recorded one of the largest jumps, increasing from N199.58 billion to N248.83 billion, a rise of nearly N50 billion.
- Niger State: Saw a marginal increase from N140.74 billion to N142.67 billion.
- Cross River State: Rose significantly from N118.13 billion to N137.36 billion, an increase of over N19 billion.
- Enugu State: Increased from N119.28 billion to N157.60 billion.
- Bauchi State: Rose steadily from N143.95 billion to N156.05 billion.
- Akwa Ibom State: Recorded a notable decline from N122.19 billion to N84.85 billion.
- Imo State: Also recorded a significant reduction from N126.14 billion to N83.75 billion.
External Debt Figures Show Similar Trends
External debt figures follow similar patterns, with Lagos remaining the most exposed state:
- Lagos State: External debt increased from $900.19 million to $1.17 billion, a sharp rise of over $270 million.
- Kaduna State: Saw a major increase from $25.76 million to $684.29 million.
- Edo State: External debt more than tripled from $112.99 million to $354.03 million.
- Ogun State: Recorded marginal growth from $211.86 million to $216.99 million.
- Cross River State: External debt nearly doubled from $118.13 million to $222.92 million.
- Niger State: Debt remained relatively stable at approximately $140.58 million.
- Kano State: Recorded a significant increase from $60.65 million to $128.04 million.
- Akwa Ibom State: External debt declined from $122.19 million to $55.46 million.
- Rivers State: Recorded a decline in external exposure from $364.39 million to $170.90 million despite higher domestic debt.
Expert Concerns Over Fiscal Sustainability
Muda Yusuf, Chief Executive Officer of the Centre for the Promotion of Private Enterprise (CPPE), expressed serious concerns about the rising public debt and unsustainable debt-service-to-revenue ratios that have constrained fiscal space. He emphasized that these conditions limit governments' capacity to fund critical infrastructure projects.
"It is important to ensure that the debt is used strictly to fund capital projects, especially infrastructure projects, that would strengthen the productive capacity of the economy," Yusuf noted in his assessment of the situation.
The growing debt burden continues to increase repayment obligations amid limited fiscal revenue, creating significant challenges for economic management at both state and federal levels. The data underscores the urgent need for strategic debt management and revenue generation strategies to ensure long-term fiscal sustainability across Nigeria's subnational governments.
