States paid a combined N455.38 billion as foreign debt service in 2025, up from N362.08 billion in 2024, according to an analysis of Federation Accounts Allocation Committee (FAAC) data released by the National Bureau of Statistics (NBS).
The year-on-year increase of N93.30 billion represents a 25.77% rise, indicating that a greater share of statutory allocations was deducted at source to meet external loan obligations.
Foreign debt service under the FAAC structure is treated as a first-line charge.
This means repayments are settled before net allocations are distributed to states, reducing the fiscal space available for capital projects, salaries, and other obligations.
What the data shows
Total foreign debt service stood at N40.09 billion in January 2025 before easing to N39.10 billion in February, reflecting a month-on-month decline of N0.99 billion or 2.48%.
From March to July, monthly deductions remained flat at N39.10 billion, pointing to a period of fixed repayment commitments.
- A further adjustment occurred in August when the total dropped to N36.14 billion, down by N2.95 billion or 7.56% from July.
- That lower level of N36.14 billion persisted through September, October, November and December, suggesting a recalibrated but stable repayment band for the final five months of the year.
- In contrast, 2024 saw sharper early movements. Deductions rose from N9.88 billion in January to N24.53 billion in February and peaked at N40.41 billion in March.
They then declined to N21.70 billion in April and remained unchanged through May, June and July.
Another step-up followed in August 2024 to N40.09 billion, a figure that held steady through December.
Lagos alone accounts for 20.38% of the states’ foreign debt service
The distribution of the 2025 burden shows heavy concentration. The top 10 states accounted for 68.57% of total foreign debt service during the year.
- Lagos recorded the highest deduction at N92.80 billion, up from N72.32 billion in 2024. The N20.49 billion increase translates to 28.33% growth, with Lagos alone contributing 20.38% of the national total.
- Rivers followed with N48.58 billion, compared with N23.13 billion in 2024. The N25.45 billion jump represents a 110.02% increase.
- Kaduna ranked third at N47.93 billion, up from N45.59 billion, reflecting a N2.34 billion increase or 5.13% growth.
- Ogun reported N25.20 billion, rising from N11.99 billion in 2024. The N13.21 billion increase amounts to 110.22%, effectively more than doubling its foreign debt service.
- Cross River posted N21.01 billion, up from N17.10 billion, representing a N3.91 billion increase or 22.86% growth. Oyo recorded N20.17 billion, compared with N17.85 billion, a rise of N2.32 billion or 12.98%.
- Edo’s deductions increased to N18.70 billion from N16.73 billion, reflecting 11.78% growth. Bauchi recorded N16.85 billion, up from N13.75 billion, an increase of 22.58%.
Kano posted N10.63 billion, compared with N8.53 billion, representing 24.67% growth. Ebonyi rounded out the top 10 with N10.37 billion, rising from N6.77 billion, a 53.09% increase.
By region, the South-West recorded the highest foreign debt service at N162.77 billion, accounting for 35.74% of the national total. The South-South followed with N100.37 billion or 22.04%, while the North-West posted N81.97 billion, representing 18.00%.
The North-East recorded N42.42 billion or 9.32%, the South-East accounted for N40.20 billion or 8.83%, and the North-Central reported the lowest at N27.65 billion, representing 6.07%.
The figures highlight the structural nature of external debt deductions within FAAC, with repayments prioritised ahead of distribution, leaving states with significant foreign exposure facing sustained fiscal pressure.
