Nigeria’s Subnational Debt Profile Rises to ₦4 Trn with Yobe Among Least Indebted States
Yobe and Others Maintain Low Debt Burdens Despite Rising Subnational Liabilities
Nigeria’s cumulative subnational debt the combined domestic borrowings of the 36 states and the Federal Capital Territory (FCT) reached approximately ₦4.002 trillion as of September 2025, according to the Debt Management Office (DMO). Despite overall upward pressure on liabilities, several states continue to maintain comparatively low debt burdens, demonstrating varied fiscal approaches within the federation.
Subnational Debt Overview
DMO data shows that total domestic debt among states and the FCT increased modestly in the third quarter of 2025, reflecting a fiscal landscape where borrowing has been relatively restrained compared with previous years. Analysts contend that the slow growth in subnational liabilities signals a degree of fiscal discipline in some parts of the country, though significant concentration of debt persists in larger economies.
Nigeria’s subnational debt constitutes a notable share of the national public debt profile, underscoring the importance of continued fiscal management. Larger states with significant infrastructure financing needs continue to command disproportionate shares of borrowing, while smaller states display more conservative debt practices.
Spotlight: States With Lower Debt Stocks
Among the states with the least debt exposure at the end of September 2025 is Yobe State, which recorded a debt stock of ₦36.38 billion, representing just about 0.91 percent of aggregate subnational liabilities. This level reflects ongoing efforts to limit borrowing and sustain manageable repayment commitments.
Other states with relatively low debt profiles are inferred in broader data sets, including smaller economies with constrained fiscal footprints. Earlier domestic debt data indicates that states such as Jigawa, Ebonyi, and Kebbi recorded lower total debt stocks (less than ₦50 billion each) as of late 2024.
Implications of Low Debt Burdens
States with lower debt stocks often benefit from:
Reduced debt servicing obligations, freeing fiscal space for essential public services.
Stronger creditworthiness, which can enhance access to favourable financing if needed.
Lower refinancing risk, particularly amid uncertain macroeconomic conditions.
However, experts caution that low debt levels alone do not guarantee economic strength states must balance borrowing restraint with sufficient investment in infrastructure, education, and healthcare to foster long-term growth.
Broader Debt Landscape and Fiscal Context
Despite the presence of low-debt states, fiscal pressures at the subnational level remain acute. Data from additional reporting indicates that ten states account for over two-thirds of total subnational debt, with larger economies like Lagos, Rivers, Delta, and Enugu carrying substantial portions of the ₦4 trillion burden. This concentration accentuates disparities in fiscal capacity and borrowing needs across the federation.
Fiscal sustainability is a central concern for policymakers as national and subnational governments manage obligations amid revenue constraints and rising expenditure demands. Strengthening internally generated revenue (IGR), improving public financial management, and aligning debt with productive investment are viewed as critical to medium-term stability.
Nigeria’s subnational debt profile climbed modestly to about ₦4 trillion in the third quarter of 2025, yet a number of states such as Yobe have managed to keep their liabilities comparatively low. These variations in debt levels reflect divergent fiscal strategies and capacities across the federation.
While low debt burdens can signal prudent management and greater fiscal flexibility, sustainable development will require a balanced approach that combines disciplined borrowing with strategic investment and revenue mobilisation. Continued monitoring and targeted reforms are likely to shape the future trajectory of state finances in Nigeria.
