Lagos, Rivers and Delta Lead as Most Indebted Nigerian States in Q3 2025
Lagos Accounts for Over a Quarter of Nigeria’s State Debts
Latest subnational debt data from the Debt Management Office (DMO) reveal a marked concentration of domestic debt among a small group of Nigerian states as of September 30, 2025. The combined domestic debt stock of the 36 states and the Federal Capital Territory (FCT) reached approximately ₦4.00 trillion, up marginally from the previous quarter.
While the overall rise was modest, a handful of states account for roughly half of the total subnational debt portfolio, underscoring the uneven fiscal pressures across Nigeria’s federating units.
Subnational Debt Landscape: Key Highlights
The DMO data show that debt holdings are heavily skewed toward a few states. The top five most indebted states Lagos, Rivers, Delta, Enugu and Ogun together owe nearly ₦2.04 trillion, representing about 50 per cent of the total domestic debt stock of states and the FCT.
Lagos State emerges as the most indebted subnational entity by a clear margin, holding approximately ₦1.046 trillion in domestic debt, or 26.13 per cent of the national subnational total. This reflects Lagos’s unique fiscal profile as Nigeria’s commercial hub, with significant infrastructure and service delivery demands.
Ranking: Top 10 Most Indebted States
As of the end of the third quarter of 2025, the leading states by domestic debt stock were:
Lagos – ₦1.046 trillion
Rivers – ₦381.21 billion
Delta – ₦247.17 billion
Enugu – ₦194.72 billion
Ogun – ₦168.09 billion
Bauchi – ₦158.20 billion
Niger – ₦143.50 billion
Cross River – ₦141.94 billion
Benue – ₦107.25 billion
Akwa Ibom – ₦95.51 billion
The full ranking highlights the fiscal disparities across states, with Lagos’s debt stock alone surpassing that of the next four states combined.
Debt Trends and State Responses
Some states have actively reduced their debt exposure in recent periods, while others have maintained or increased borrowing to support capital projects or cover budget shortfalls. For instance, Akwa Ibom’s domestic debt declined by nearly 9.8 per cent over the quarter, signaling possible repayments or slower new borrowing.
Other states further down the list also reflect varying debt profiles that may be influenced by revenue performance, federal allocations and expenditure commitments. These include Benue, Cross River, Bauchi and Niger among others.
Implications for Fiscal Policy
Subnational debt composition matters for economic planning and fiscal sustainability. High debt burdens can constrain states’ abilities to fund essential services or respond to cyclical shocks, particularly where internally generated revenue (IGR) remains relatively low compared to expenditures.
Lagos’s dominance in the debt hierarchy reflects both the sheer scale of economic activity in the state and its development obligations. For other states, structural reforms to enhance revenue mobilisation and debt management will remain important policy priorities.
Looking Ahead
As Nigeria’s economy evolves, continued monitoring of subnational debt dynamics will be essential for policymakers and investors alike. The distribution of debt across states, alongside revenue trends and federal allocations, will shape states’ fiscal space and their capacity to finance infrastructure and service delivery.
The DMO’s periodic reporting provides crucial empirical grounding for these assessments, highlighting where fiscal pressures are concentrated and where governance responses are yielding results.
