Lagos State, Rivers State and Kaduna State have emerged as Nigeria’s most indebted subnational governments, according to the latest report released by the National Bureau of Statistics, highlighting growing fiscal pressure across states amid a rising national debt burden.
The figures were contained in the Nigeria Q4 2025 Domestic and External Debt Report published on Monday.
Lagos Retains Top Position
According to the report, Lagos State maintained its position as the country’s most indebted state, recording ₦1.22 trillion in domestic debt and $1.17 billion in external liabilities.
The data reflects Lagos’ status as Nigeria’s commercial centre and one of the most economically active states, with substantial borrowing linked to infrastructure development, urban expansion, and major public investment projects.
Rivers, Kaduna Also Rank High
Rivers State ranked second in domestic debt with ₦378.81 billion, indicating continued dependence on borrowing to finance expenditure in an environment often influenced by fluctuations in oil revenue.
Kaduna State stood out on the external debt chart, recording $684.29 million in foreign obligations, making it one of the states most exposed to exchange-rate-related debt risks.
National Debt Rises to ₦159.28 Trillion
At the national level, Nigeria’s total public debt stock rose to ₦159.28 trillion, approximately $110.97 billion, in the fourth quarter of 2025.
This marks an increase from ₦153.29 trillion, or $103.94 billion, recorded in the previous quarter, representing a 3.9 percent quarter-on-quarter rise.
The increase reflects continued borrowing by both the federal and state governments to bridge fiscal deficits and fund priority expenditures.
Domestic and External Breakdown
The report showed that external debt stood at ₦74.43 trillion, representing 46.73 percent of the total debt stock.
Domestic debt accounted for ₦84.85 trillion, or 53.27 percent.
The near-even distribution underscores Nigeria’s reliance on both local and foreign financing sources, even as exchange rate volatility continues to increase the cost of servicing external loans.
Other States With Significant Debt Exposure
Beyond the top three debtor states, several others also recorded notable liabilities.
Bauchi State posted $220.57 million in external debt and ₦156.05 billion domestically.
Delta State recorded $63.42 million in foreign debt alongside ₦248.83 billion in domestic obligations.
Enugu State also featured prominently with $99.88 million in external debt and ₦157.60 billion in domestic borrowings.
States With Lower Debt Profiles
In contrast, some states maintained relatively low debt levels.
Jigawa State recorded the least domestic debt at ₦1.60 billion, followed by Ondo State with ₦8.42 billion.
On the external debt side, the Federal Capital Territory recorded the lowest exposure at $26.80 million, while Zamfara State followed with $41.93 million.
Concerns Over Sustainability
The expanding debt burden has become a growing concern for policymakers, economists, and citizens, especially as debt servicing continues to consume a substantial share of government revenues.
Analysts warn that rising debt obligations could reduce fiscal flexibility, limit investment in critical sectors, and weaken the government’s ability to respond to economic shocks.
They note that while Lagos, Rivers and Kaduna’s debt levels partly reflect their economic size, population, and development ambitions, sustained borrowing without corresponding growth in internally generated revenue may heighten long-term fiscal risks.
Outlook
As Nigeria navigates inflationary pressure, revenue constraints, and currency volatility, the trajectory of public debt—particularly at the state level—is expected to remain a central issue in economic management and fiscal policy discussions.
