Despite a slight national drop in subnational borrowing, Nigeria’s ten most indebted states have collectively increased their debt burden, recording a total of ₦2.48 trillion in the first quarter of 2025. This marks a 2.5% rise compared to the same period in 2024, with the top 10 states now accounting for 64% of the country’s total state-level debt.
Lagos still leading the pack
Lagos State continues to dominate the debt chart, though its debt slightly declined. The state owed ₦874.04 billion in Q1 2025, maintaining its position as Nigeria’s most indebted state by a wide margin. Although Lagos generates the highest internal revenue in the country, concerns are growing about the long-term sustainability of its debt profile.
Rivers state debt skyrockets
Rivers State recorded the most significant year-on-year increase among the top ten, with a debt stock of ₦364.39 billion—an alarming 56.7% jump from the previous year. Analysts link this sharp rise to heightened capital spending following the 2023 elections and a series of infrastructure projects.
Other big movers
Delta (₦204.72 billion), Ogun (₦190.14 billion), and Enugu (₦188.42 billion) followed closely. Enugu’s debt nearly doubled within a year, signaling a shift toward heavy reliance on borrowing to finance development. Niger and Bauchi also climbed the chart with ₦143.75 billion and ₦142.40 billion respectively, reflecting increased financing needs for capital projects.
Benue and Imo States hovered just above ₦120 billion each, while Akwa Ibom rounded off the list with ₦118.21 billion, a notable 17.3% decrease from the previous year due to restrained borrowing and improved oil-related revenue flows.
Top 10 most indebted states in Q1 2025
| Rank | State | Debt Stock (₦ Billion) | Year-on-Year Change |
|---|---|---|---|
| 1 | Lagos | 874.04 | Slight decrease |
| 2 | Rivers | 364.39 | +56.7% |
| 3 | Delta | 204.72 | Moderate increase |
| 4 | Ogun | 190.14 | Rising |
| 5 | Enugu | 188.42 | Nearly doubled |
| 6 | Niger | 143.75 | Increased |
| 7 | Bauchi | 142.40 | Increased |
| 8 | Benue | ~129.82 | Stable |
| 9 | Imo | ~122.09 | Slight change |
| 10 | Akwa Ibom | 118.21 | -17.3% |
The bigger picture
This upward trend in state-level borrowing comes at a time when Nigeria is grappling with fiscal pressure, dwindling federal allocations, and the urgent need for infrastructure development. While loans have become a major tool for financing capital projects, many states are now facing mounting debt servicing obligations.
In some cases, states are spending more than their entire internally generated revenue (IGR) on debt repayments, raising alarms about the sustainability of their fiscal policies. Lagos alone spent over ₦26 billion servicing debt in Q1 2025.
Experts warn of fiscal risks
Financial analysts have warned that if left unchecked, rising debt profiles could choke future investments in healthcare, education, and essential public services. They advocate a balanced approach: increasing internally generated revenue, prioritizing concessional borrowing, and eliminating wasteful spending.
In summary, while borrowing remains a crucial lifeline for development, the growing burden of debt demands more strategic fiscal planning. Nigeria’s states must now choose between deepening the debt trap—or charting a path toward sustainable growth.
