Lagos State has emerged as the most indebted state in Nigeria, owing a total of N1.22 trillion in domestic debt and $1.17 billion in external debt as of the fourth quarter (Q4) of 2025, according to the National Bureau of Statistics (NBS).
The NBS announced this on Monday in its Nigeria’s Q4 2025 domestic and external debt report, revealing that the country’s total debt stock, comprising both domestic and external debt, rose from N153.29 trillion ($103.94 billion) in Q3 2025 to N159.28 trillion ($110.97 billion) in Q4 2025. This represents an increase of 3.90 percent on a quarter-on-quarter basis.
Debt Composition
According to the report, total external debt stood at N74.43 trillion, while total domestic debt was N84.85 trillion in Q4 2025. The share of external debt (in naira value) to total public debt was 46.73 percent, while the share of domestic debt (in naira value) was 53.27 percent.
Subnational Debt Breakdown
Among the subnationals, Lagos State recorded the highest domestic debt in Q4 2025 with N1.22 trillion, followed by Rivers State with N378.81 billion. Jigawa State recorded the lowest domestic debt with N1.60 billion, followed by Ondo State with N8.42 billion.
Lagos State also recorded the highest external debt over the reference period with $1.17 billion, followed by Kaduna State with $684.29 million. The Federal Capital Territory (FCT) had the lowest external debt with $26.80 million, followed by Zamfara State with $41.93 million.
Other heavily indebted states include Bauchi with $220.57 million external and N156.05 billion domestic debt; Delta with $63.42 million external and N248.83 billion domestic debt; and Enugu with $99.88 million external and N157.60 billion domestic debt.
Concerns Over Rising Debt Burden
The issue of the rising debt burden has been a cause for concern for Nigerians, as debt service obligations put high pressure on the country’s revenue. Early this month, the World Bank warned that Nigeria’s rising debt service costs are reducing its ability to fund critical infrastructure. It noted a sharp drop in capital spending to 1.0 percent of GDP from 1.3 percent in 2024 because debt servicing is crowding out investment.
The International Debt Report 2025 noted that Nigeria and other Sub-Saharan African countries must initiate export diversification and fiscal reforms to address their rising debt challenges. It stated that debt levels and servicing burdens continued to rise even as growth remains subdued, underscoring persistent fiscal stress.
