Lagos, Rivers and Kaduna states have emerged as Nigeria’s most indebted subnational governments, according to the latest data released by the National Bureau of Statistics (NBS), highlighting intensifying fiscal pressures across the country’s tiers of government amid a rising national debt profile.
The NBS, in its Nigeria Q4 2025 Domestic and External Debt Report published on Monday, disclosed that Lagos State continues to dominate the debt landscape, recording N1.22trn in domestic debt alongside $1.17bn in external obligations.
The figures reinforce Lagos’ position not only as Nigeria’s commercial hub but also as the most leveraged state, reflecting its extensive infrastructure financing needs and large-scale economic commitments.
Rivers State ranked second in domestic debt with N378.81bn, underscoring its continued reliance on borrowing to support expenditure, particularly in a volatile revenue environment tied to oil receipts. Kaduna State, meanwhile, stood out on the external debt front with $684.29m, placing it among the most exposed states to foreign currency liabilities.
The broader national picture points to a steady escalation in public debt. Nigeria’s total debt stock rose to N159.28trn (approximately $110.97bn) in the fourth quarter of 2025, up from N153.29trn ($103.94bn) recorded in the preceding quarter.
This represents a 3.90 per cent increase quarter-on-quarter, reflecting sustained borrowing at both federal and subnational levels to bridge fiscal gaps and fund critical expenditures.
A closer look at the composition of the debt shows that external borrowings stood at N74.43trn, accounting for 46.73 per cent of the total, while domestic debt reached N84.85trn, representing 53.27 per cent. The near-even split highlights Nigeria’s dual dependence on local and foreign financing sources, even as exchange rate pressures continue to elevate the cost of servicing external debt.
Beyond the top three states, the report identified several other sub-nationals with significant debt burdens. Bauchi State recorded $220.57m in external debt and N156.05bn domestically, while Delta State posted $63.42m in external obligations alongside N248.83bn in domestic debt. Enugu State also featured prominently, with $99.88m in external debt and N157.60bn in domestic borrowings.
In contrast, some states maintained relatively low debt profiles. Jigawa State reported the least domestic debt at N1.60bn, followed by Ondo State with N8.42bn.
On the external side, the Federal Capital Territory recorded the lowest exposure at $26.80m, with Zamfara State following at $41.93m, suggesting varying fiscal strategies and borrowing capacities across the federation.
The growing debt burden has become a focal point of concern for policymakers, economists and citizens alike, particularly as debt servicing obligations continue to absorb a significant share of government revenues.
Analysts warn that this trend could constrain fiscal flexibility and limit the government’s ability to respond to economic shocks or invest in long-term development priorities.
Economic analysts note that while Lagos, Rivers and Kaduna’s positions as leading debtor states partly reflect their economic size, population and development ambitions, the scale of their obligations raises important questions about debt sustainability at the subnational level.
They argue that without commensurate growth in internally generated revenue and more efficient public spending, the reliance on borrowing could heighten fiscal risks over time.
As Nigeria continues to navigate a complex economic environment marked by inflationary pressures, exchange rate volatility and constrained revenues, the trajectory of public debt, particularly at the state level, is expected to remain a critical issue for fiscal policy and economic stability.
