Eleven States and FCT Raise Domestic Debt by ₦373.06 Billion in Nine Months
Debt Management Office Data Shows Significant Subnational Borrowing in Nigeria
Eleven Nigerian states and the Federal Capital Territory (FCT) expanded their domestic debt obligations by a combined ₦373.06 billion between December 2024 and September 2025, according to the latest Debt Management Office (DMO) subnational debt data. During this period, the total domestic debt stock for all 36 states and the FCT rose modestly from ₦3.97 trillion to ₦4.00 trillion, a 0.88 per cent increase at the aggregate level.
Subnational Debt Growth and Concentration
While total domestic borrowing across all subnational entities showed minimal net growth, the concentration of liabilities shifted significantly. The 11 states and the FCT accounted for the majority of net borrowing, with their combined debt rising from ₦2.22 trillion to ₦2.59 trillion within the nine-month period, representing a 16.81 per cent increase. These jurisdictions now account for 64.77 per cent of the national subnational domestic debt stock, up from 55.94 per cent at the end of 2024.
Among the top contributors:
Lagos State retained its position as the subnational debtor with the largest domestic obligations, increasing its debt from ₦900.19 billion to ₦1.05 trillion, a ₦145.62 billion (16.18 per cent) rise.
Enugu State recorded one of the most pronounced increases in both absolute and percentage terms, with domestic debt rising from ₦119.28 billion to ₦194.72 billion, a 63.24 per cent jump.
Delta State saw its stock increase by ₦47.60 billion, reaching ₦247.17 billion.
Borno State posted the highest percentage increase among the group, climbing 69.19 per cent from ₦27.91 billion to ₦47.23 billion.
Other states that expanded borrowing include Rivers, Cross River, Bauchi and the FCT.
Offsetting Reductions: A Mixed Fiscal Landscape
Despite the sharp increases among the 11 states and the FCT, a larger cohort of 25 subnational governments reduced their domestic debt during the same period. This divergence in fiscal strategies explains the modest overall rise in total domestic borrowing. Key reductions were recorded in states such as Kogi, which lowered its stock by 65.59 per cent, and Ogun and Edo, which also posted significant repayments.
This split highlights varying approaches to debt management among subnational governments, with some prioritising consolidation and others expanding debt to finance development or bridge fiscal gaps.
Implications for Fiscal Policy and State Finances
The rise in domestic debt among a concentrated group of states raises questions about debt sustainability and fiscal risk management at the subnational level. While increased borrowing can fund infrastructure and service delivery, it also elevates exposure to repayment pressures and potential refinancing risks, particularly where internally generated revenue (IGR) growth lags expenditure commitments.
Conversely, the trend of debt reduction among the majority of states suggests a concerted effort by several subnational governments to implement tighter financial controls or pay down existing liabilities.
Analysts emphasise the importance of aligning debt accumulation with clear investment priorities and maintaining prudent borrowing practices to mitigate risks associated with debt servicing crowding out recurrent expenditure or undermining fiscal stability.
Between December 2024 and September 2025, eleven states and the FCT drove a substantial portion of Nigeria’s subnational domestic borrowing, adding ₦373.06 billion to their debt portfolios. Despite this increase, total domestic debt across all states and the FCT grew marginally, reflecting a broader pattern of heterogeneous fiscal management across Nigeria’s subnational landscape. Stakeholders, including investors and policymakers, will be monitoring how these debt profiles evolve in the context of revenue flows, budget execution and economic performance.
