Lagos Leads as 10 States Owe N2.68tn, 67% of Subnational Debts
Nume Ekeghe
Amid mounting public debt pressures, it has been established that the fiscal squeeze extends beyond the federal tier to the subnational level, as 36 states and the Federal Capital Territory (FCT) collectively recorded a combined domestic and external debt stock of N4.002 trillion as at September 30, 2025.
This, analysts said, underscores the deepening exposure of subnational governments to rising debt obligations.
Latest figures released by the Debt Management Office (DMO) show that while the total public debt stock of the country stood at N153.29 trillion within the review period, the debt owed by states and the FCT accounted for 2.61 per cent.
A closer look at the data reveals a significant concentration of liabilities among a small group of states. Ten states alone were responsible for N2.68 trillion about 67 per cent of total subnational debt underscoring the uneven fiscal landscape across the federation.
Lagos State tops the list by a wide margin, with a debt profile of N1.045 trillion. This represents roughly 26 per cent of the total debt stock of all 36 states and the FCT combined, highlighting the scale of borrowing by the country’s commercial nerve centre.
Lagos’ debt portfolio reflects its aggressive infrastructure expansion strategy, including investments in transportation, housing and urban renewal.
Far behind Lagos is Rivers State, with a debt stock of N381.205 billion. Delta State follows with N247.171 billion, reflecting sustained borrowing among oil-producing states despite relatively stronger internally generated revenues.
Enugu State ranks fourth with N194.715 billion, while Ogun State and Bauchi States recorded debt stocks of N168.093 billion and N158.197 billion respectively.
Further down the list, Niger State owes N143.469 billion. Cross River State and Benue State posted debt figures of N141.941 billion and N107.254 billion respectively, while Akwa Ibom State rounds off the top 10 with N95.506 billion.
The concentration of debt among these states raises questions about sustainability, particularly against the backdrop of exchange rate volatility, rising interest costs and slower revenue growth. While some indebted states argue that borrowings are tied to long-term infrastructure and growth-enhancing projects, analysts warn that weak fiscal buffers and heavy reliance on federal allocations could heighten refinancing risks.
With subnational debt accounting for a relatively small share of Nigeria’s overall public debt stock, the immediate systemic risk may appear contained. However, the uneven distribution of liabilities and varying revenue capacities among states suggest that fiscal stress could deepen in specific regions if macroeconomic headwinds persist.
