April 20, (THEWILL) — Nigeria’s subnational debt burden rose significantly in 2025, with the combined liabilities of the 36 states and the Federal Capital Territory (FCT) reaching N4.36 trillion, underscoring mounting fiscal pressures at the state level.
Latest data released by the Debt Management Office (DMO) shows that total debt increased from N3.97 trillion in 2024, marking a 9.89 percent year-on-year rise.
In absolute terms, this represents an additional N392.41 billion, driven largely by increased borrowing to finance infrastructure projects, bridge revenue shortfalls, and cope with a difficult macroeconomic environment.
Lagos State retained its position as the most indebted subnational entity, with a debt stock of N1.04 trillion.
This accounts for 27.97 percent of the total, meaning the state alone holds more than a quarter of the country’s subnational debt.
The data also reveals a heavy concentration of debt among a small number of states. The top 10 most indebted states collectively account for N2.96 trillion, representing 67.98 percent of the total debt stock.
This trend highlights a widening fiscal imbalance, where larger and more economically active states dominate borrowing.
Further breakdown shows that Lagos, Rivers, Delta, Ogun, and the FCT together owe about N2.26 trillion more than half of the total subnational debt. The concentration raises concerns about sustainability and fiscal vulnerability, particularly as states continue to rely on borrowing amid revenue constraints.
