Meet Top Nigerian States With Highest Domestic Debt, Lagos Leads
- Lagos leads Nigeria's subnational debt with N1.04 trillion, representing 27.97% of total liabilities
- Nigeria's overall debt rose to N4.36 trillion in 2025, a 9.89% increase from the previous year
- Benue is the only state in the top 10 to reduce debt, dropping by 12.52% in 2025
Pascal Oparada is a journalist with Legit.ng, covering technology, energy, stocks, investment, and the economy for over a decade.
Lagos is leading as Nigeria’s most indebted state, with a massive debt profile of N1.04 trillion.
This is according to fresh data released by the Debt Management Office (DMO), which tracked the country’s subnational debts.
Source: UGC
36 states debt spike
The figure shows that Nigeria’s combined debt profile for the 36 states, including the Federal Capital Territory (FCT), spiked to N4.36 trillion in 2025.
The amount is an increase from N3.97 trillion in 2024, representing a 9.89% rise in one year.
The debt office’s data shows Lagos’ dominant position in the subnational borrowing, which accounts for 27.97% of the entire debt stock, more than a quarter of total liabilities by the states and the FCT.
An analysis of the figures shows that debt remains heavily concentrated among a few states.
Top 10 states with the highest debt
The leading 10 most indebted states account for N2.96 trillion.
The figure represents 67.98% of the total subnational debt stock, highlighting a growing fiscal disparity across the country.
Further breakdown shows that Lagos, Rivers, Delta, Ogun, and the FCT collectively owe almost N2.26 trillion, more than half of the total debt burden of the state governments.
According to the report, many states have continued to rely on borrowing to fund infrastructure projects, plug budget deficits, and manage growing fiscal pressures amid dwindling revenues.
Benue reduces debt significantly
However, some avoided the debt trap and considerably reduced their borrowing.
Benue emerged as the only state in the top 10 with significant debt reduction during the review period.
The state's debt dropped by 12.52% to N107.23 billion in 2025 from N122.58 billion in 2024.
The drop shows a combination of debt repayment efforts, reduced new borrowing, or restructuring of existing liabilities.
Analysts note it may also reflect tighter fiscal space for capital spending, the Daily Sun reported.
Nigeria's debt profile skyrockets
Meanwhile, data released Tuesday, April 14, 2026, by the DMO showed total public debt rose by N5.98 trillion (3.9 per cent) from N153.29 trillion at the end of September 2025.
Year-on-year, the increase was N14.61 trillion (10.1 per cent) from N144.67 trillion in December 2024.
Source: Getty Images
Both domestic and external loans contributed to the quarterly jump. External debt grew from N71.48 trillion to N74.43 trillion (up N2.95 trillion or 4.1 per cent), while domestic debt rose from N81.82 trillion to N84.85 trillion (up N3.03 trillion or 3.7 per cent).
Domestic debt still formed the larger share at 53.27 per cent, with external debt at 46.73 per cent—a composition almost unchanged from the previous quarter.
Nigeria spends over N2trn to repay domestic debt
Legit.ng earlier reported that Nigeria’s debt service obligations surged in the final quarter of 2025, with total domestic debt service rising to N2.28 trillion, while external debt service payments stood at $1.80 billion, according to data from the Debt Management Office.
The figures captured in the Debt Management Office public debt report released on Monday, April 13, revealed mounting fiscal pressures on the government, as interest payments continued to dominate debt servicing costs across both domestic and external obligations.
Domestic data shows that interest payments alone accounted for N2.17 trillion between October and December, representing over 95% of total domestic debt service. In contrast, principal repayments were significantly lower at N108.88 billion.
Source: Legit.ng
