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Nigeria’s state-level domestic debt stock continued to rise in the second quarter of 2026 to N4.59 trillion, although the increase was much slower than the sharp jump of 3.74% recorded between December 2025 and March 2026.
Data from the Debt Management Office (DMO) analyzed by Nairametrics Research show that the domestic debt stock of the 36 states and the Federal Capital Territory (FCT) rose to N4.59 trillion as of June 2026, from N4.52 trillion in March 2026.
This represents a 1.49% quarter-on-quarter increase, or about N67.57 billion.
Notably, the ten most indebted states, including the Federal Capital Territory (FCT) recorded a combined domestic debt stock of N3.22 trillion as of June 2026, accounting for over 70% of the total subnational domestic debt stock of N4.59 trillion.
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What the data is saying
An analysis of the State Domestic Debt Report for June 2026 reveals that the debt stock of the top ten most indebted states rose by 4.44% quarter-on-quarter from N3.08 trillion in March 2026 and increased by 29.35% year-on-year from N2.49 trillion in June 2025.
While total state debt increased by N627.35 billion year-on-year, the top 10 states alone accounted for about N731.05 billion of that increase.
This means debt outside the top 10 actually fell by about N103.69 billion over the same period.
Overall, the total domestic debt stock of the 36 states and the FCT increased to N4.59 trillion in June 2026, representing a 1.49% quarterly from N4.52 in March 2026.
Compared with the N3.96 trillion recorded in June 2025, the latest figure is 15.83% higher, representing an increase of about N627.35 billion.
Most Indebted states by domestic debt in Q2 2026
10. Benue – N112.32 billion
Benue State completed the top ten ranking with N112.32 billion in domestic debt. Benue’s debt profile improved further, declining 0.48% from N112.85 billion in Q1 2026, improving from the eleventh position in the previous quarter.
The state recorded the largest year-on-year of 15.88% from N133.53 billion in Q2 2025, representing a reduction of N21.21 billion.
The state contributed 2.45% of total domestic debt and 3.49% of the top-ten debt stock.
9. Cross River – N130.01 billion
Cross River continues to reduce its debt to N130.01 billion, representing a 1.73% decline from N132.30 billion in Q1 2026.
The state ranked ninth, the same position as it was in Q1 2026.
Year-on-year, the reduction is more significant as debt fell 11.73% from N147.28 billion in Q2 2025, a reduction of N17.27 billion over the year.
The decline reflects ongoing debt repayments and limited new borrowing activities.
8. Niger – N140.00 billion
Niger State placed eighth with N140.00 billion, representing 3.05% of total debt. Debt levels remained largely stable, declining marginally by 0.49% from N140.69 billion in Q1 2026. It was also 1.08% lower than the N141.52 billion recorded in June 2025.
Niger therefore remains relatively stable as it retains its eight position as of March 2026.
7. Bauchi – N157.35 billion
Bauchi State ranked seventh with a debt stock of N157.35 billion, posting a moderate increase of 1.88% from N154.45 billion in Q1 2026 and a 9.56% increase from ₦143.62 billion in Q2 2025.
The state accounted for 3.43% of Nigeria’s total subnational debt stock and 4.88% of the top 10 state-level debt stock.
6. Ogun – N189.05 billion
Ogun State debt stock falls by 5.83% to N189.05 billion from N200.75 billion in Q1 2026, accounting for 4.12% of total debt.
However, it was 16.04% higher than the N162.92 billion recorded in Q2 2025.
The state reduced its obligations during the latest quarter but remains more indebted than it was a year earlier.
The quarterly decline reflects repayments, refinancing, and reduced new borrowing.
5. Edo – N214.93 billion
Edo State climbed to fifth position with debt stock rising to N214.93 billion, accounting for 4.68% of the total.
The state recorded a 24.69% quarter-on-quarter increase, up from N172.37 billion in March 2026.
Year-on-year, Edo’s debt rose by a much larger 167.60%, compared with N80.32 billion in June 2025, representing an increase of approximately N134.61 billion in one year.
The sharp annual growth indicates aggressive debt accumulation between June 2025 and June 2026, potentially driven by infrastructure development, urban renewal projects, and financing needs associated with ongoing economic programmes.
4. Rivers – N354.64 billion
Rivers State ranked fourth from its third position in Q1 2026, with domestic debt of N354.64 billion, representing 7.72% of total debt stock.
Its debt fell 2.15% from N362.43 billion in Q1 2026. Rivers also recorded a 2.68% year-on-year decline from N364.39 billion in Q2 2025.
This makes Rivers one of the few states among the top 10 whose debt stock has declined over both comparison periods.
Notably, Rivers was previously one of Nigeria’s largest state debtors but has now been overtaken by Delta and the FCT in the latest ranking.
3. FCT – N358.79 billion
The Federal Capital Territory (FCT) maintained third position with a domestic debt stock of N358.79 billion, from the second position it stood in Q1 2026.
Although the FCT recorded a 7.97% quarterly decline from N389.88 billion in March 2026, it still posted the largest annual increase among the top debtors, with debt surging by 405.06% year-on-year, translating to an increase of about N287.75 billion within one year.
The debt stock represents 7.81% of total domestic debt and 11.14% of the top ten debt stock.
The sharp increase in the annual figure reflects increased financing for ongoing infrastructure expansion, transportation projects, urban development initiatives, and public facility upgrades within the federal capital.
2. Delta – N358.79 billion
Delta State ranked second with a domestic debt stock of N369.30 billion, accounting for 8.04% of total state debt and 11.46% of the top ten debt stock.
The state’s debt profile recorded one of the sharpest increases among the top debtors as Debt rose by 72.69% from N213.85 billion in Q1 2026 to N369.30 billion in Q2 2026, indicating substantial new borrowing and debt restructuring during the quarter.
On a year-on-year basis, the increase was even larger, at 80.44%, compared with ₦204.67 billion in June 2025, adding approximately N164.64 billion to its debt stock over the past year.
The increase may reflect intensified infrastructure spending, capital project financing, and efforts to bridge funding gaps amid rising development demands.
The increase means Delta moved from being the fourth-largest debtor in Q1 to the second largest in Q2 2026.
1. Lagos – N1.20 trillion
Lagos remains Nigeria’s most indebted state with a domestic debt stock of N1.20 trillion.
The state alone accounted for 26.03% of the total N4.59 trillion domestic debt nationwide and 37.10% of the debt held by the top ten most indebted states, highlighting Lagos’ outsized role in Nigeria’s subnational debt profile.
However, Lagos’ debt fell by 0.81% from N1.21 trillion in Q1 2026.
Compared with June 2025, when Lagos had N1.04 trillion, its debt is still 14.78% higher year-on-year. That means Lagos added N153.93 billion to its domestic debt stock over the 12-month period, even though it reduced its debt slightly during the second quarter.
The increase over the past year is linked to Lagos’ continued infrastructure financing requirements, including road projects, rail transportation investments, urban renewal programmes, and other capital expenditures associated with managing the country’s largest economy and population.
As Nigeria’s largest commercial center, Lagos has maintained significant capital spending needs around transportation, roads, water infrastructure and other urban projects. These types of projects can require long-term financing.
Notably, Lagos’ debt did not increase in Q2 2026 despite remaining the largest borrower among the states.
What you should know
The latest debt figures reveal contrasting fiscal strategies among Nigeria’s states, with some governments increasing borrowing to support infrastructure and development projects, while others are gradually lowering their debt exposure through repayments and tighter fiscal management.
The sharp increases recorded in Delta, Edo, and the FCT point to stronger borrowing activity over the past year, while declines in Rivers, Cross River, and Benue suggest efforts to improve fiscal sustainability and moderate debt growth.
With debt service costs remaining a growing concern for subnational governments, the key challenge will be ensuring that borrowed funds translate into economic growth, improved infrastructure, and stronger revenue generation.
