Nigeria’s subnational debt profile deteriorated further in 2025, with the combined debt stock of the 36 states and the Federal Capital Territory (FCT) rising to N4.36 trillion.

Even as Lagos maintained its position at the top with a debt profile of N1.04 trillion.

The figures are culled from the latest released data on states’ debt profile by the Debt Management Office (DMO), reflecting increased borrowing by state governments to fund infrastructure, manage fiscal gaps, and navigate a challenging macroeconomic environment.

Total debt stock of the 36 states and the FCT increased from N3.97 trillion in 2024 to N4.36 trillion in 2025, representing a 9.89% year-on-year increase.

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In absolute terms, this translates to an increase of N392.41 billion, with borrowing concentrated among a few large states.

What the data is saying 

The data shows a significant concentration of debt among Nigeria’s largest states, with the top 10 accounting for the bulk of total obligations, further highlighting Nigeria’s widening fiscal imbalance at the state level.

  • Total subnational debt rose to N4.36 trillion in 2025 from N3.97 trillion in 2024, a 9.89% increase year-on-year.
  • The top 10 most indebted states accounted for N2.96 trillion, contributing a significant 67.98% of the total debt stock, highlighting the concentration of debt among a few large states.
  • The report also revealed that a large share of subnational debt is concentrated in just a handful of states — Lagos, Rivers, Delta, Ogun, and Federal Capital Territory— which together owe nearly N2.26 trillion, roughly more than half of the entire N4.36 trillion debt stock.
  • Lagos stands far ahead of every other state, making up 27.97% of the total debt, more than a quarter of the total debt.

Top 10 most indebted states in Nigeria – 2025   

Benue – N107.23 billion

Benue State stood out as the only state in the top 10 to reduce its debt stock.

The state recorded a decline of 12.52% with its debt falling to N107.23 billion, representing 2.46% of total debt, from N122.58 billion in 2024.

This decline suggests active debt repayment, reduced fresh borrowing, or restructuring of existing liabilities.

While positive, it also raises questions about whether fiscal consolidation constrained capital investment

Cross-River – N137.36 billion

Cross River’s debt increased to N137.36 billion, contributing 3.15% of total debt.

This marks a 16.27% increase from N118.13 billion in 2024.

Cross River’s higher growth rate reflects renewed capital spending for infrastructure and tourism-related projects and fiscal adjustments to support state spending.

Niger – N142.67 billion

Niger State maintains a stable debt profile with N142.67 billion, accounting for 3.27% of total debt.

This represents a modest 1.37% increase from N140.74 billion in 2024, majorly driven by minimal new borrowing, stable debt management strategy and limited fiscal expansion

The state maintained a relatively flat debt trajectory.

Bauchi – N156.05 billion

Bauchi’s debt stood at N156.05 billion, contributing 3.58% of total debt, reflecting steady accumulation, typical of states balancing development needs with constrained revenue bases.

This reflects an 8.41% increase from N143.95 billion in 2024.

The key drivers to this steady growth are gradual borrowing tied to development programmes and support from concessional loans and budget financing

Enugu – N157.60 billion

Enugu records strong double-digit growth as its debt rose to N157.60 billion, accounting for 3.61% of total debt and representing a 32.12% increase from N119.28 billion in 2024.

This increased debt ranking of the state suggests heavier reliance on borrowing to fund infrastructure and social investments, amid widening fiscal gaps and expansion in capital expenditure.

FCT – N188.86 billion

FCT posts the fastest growth rate

The Federal Capital Territory recorded one of the most significant increases, with debt rising to N188.86 billion, representing 4.33% of total debt.

This marks a sharp 197.15% increase from N63.56 billion in 2024, translating to a N125.31 billion escalation.

While starting from a lower base, the tripling of the FCT’s debt stock reflects increased borrowing for urban infrastructure and capital projects (transport and housing), heightened capital outlays tied to Abuja’s rapid population growth.

This makes the FCT the fastest-growing debt profile among the top states and marks a structural shift in the FCT’s fiscal posture.

Ogun – N227.47 billion

Ogun State’s debt profile extended steadily as it posted a total debt of N227.47 billion, contributing 5.22% to the total debt stock.

This represents a 7.37% increase from N211.86 billion in 2024. In absolute terms, the state recorded an increase of N15.61 billion in a year.

The increase is consistent with Ogun’s expanding industrial footprint, driven by road construction across industrial corridors, investments to attract manufacturing multinationals, and population‑driven capital demands linked to spillover growth from Lagos.

The growth is also reflected in the continued industrial and infrastructure expansion, moderate reliance on domestic borrowing and strategic financing for economic development projects

Delta– N248.83 billion 

 

Delta records strong debt expansion as the state’s debt rose to N248.83 billion, accounting for 5.71% of total debt.

This marks a 24.68% increase from N199.58 billion in 2024, with a N49.26 billion rise.

Delta State emerged among the fastest‑growing debt profiles in 2025 as the surge points renewed infrastructure financing, increased reliance on borrowing amid limited IGR strength, and possible refinancing of existing obligations as fiscal pressures intensified.

Rivers – N81 billion

Rivers State ranked second with a debt stock of N378.81 billion, representing 8.69% of total debt.

This reflects a modest 3.96% increase from N364.39 billion in 2024.

Rivers’ relatively modest growth rate suggests restrained borrowing, reflecting completion of earlier capital projects, cautious fiscal positioning amid oil‑sector volatility, and an effort to stabilize debt service costs.

The stable but elevated debt position of the state also reflects a relatively stable fiscal position backed by oil revenues, as the state remains structurally exposed to federation revenue fluctuations tied to oil production and prices.

Rivers remains one of the more stable debt profiles among the top states.

Lagos– N1.22 trillion  

Lagos State retained its position as Nigeria’s most indebted subnational entity by a wide margin, with a debt stock of N1.22 trillion, thereby reflecting a share of 27.97% of total debt.

The state’s debt profile increased year-on-year by 35.78% from N900.19 billion recorded in 2024, translating to a N319.27 billion jump — the largest increase among all states.

Lagos alone accounted for nearly one‑third of the entire subnational debt stock, contributing more debt than the combined total of several mid‑tier states.

The sharp rise in Lagos’ debt reflects the state’s aggressive capital spending strategy, particularly in transport infrastructure, urban renewal projects, power initiatives, and counterpart funding for large‑scale public‑private partnerships.

Despite the increase, Lagos’ strong internally generated revenue (IGR) continues to support its borrowing capacity.

What this means 

The rise in subnational debt in 2025 reflects a balancing act between financing development and maintaining fiscal sustainability. While borrowing supports infrastructure and economic growth, it also raises concerns about repayment capacity.

  • Infrastructure financing, inflationary pressures, and revenue gaps remain the dominant driver of increased debt across most states
  • Debt concentration among the top states highlights uneven economic development and spending patterns, with Lagos alone accounting for 27.97%.
  • While states like Lagos, Delta, and Enugu expanded borrowing, Benue, among the most indebted states, reduced its debt stock, highlighting limited fiscal space nationwide.

The sustainability of Nigeria’s subnational debt will depend on how effectively states can grow revenue, manage debt servicing costs, and ensure that borrowed funds translate into measurable economic outcomes.