• Imo, Enugu, Oyo, Kaduna top borrowers’ list

By Uche Usim

Latest data from the Debt Management Office (DMO) has revealed that 26 Nigerian states increased their external debt by $239 million in the first half of 2025.

The borrowing figures highlight both borrowing pressures and efforts at debt management across the country.

The DMO reported that Nigeria’s total external debt stood at $46.98 billion as of June 2025. While the aggregate subnational external debt rose only slightly, from $4.8 billion to $4.812 billion, the small net increase masks divergent trends among individual states. Some states aggressively repaid existing loans, while others borrowed more in the first six months of the year.

Imo State recorded the largest single increase, adding $36.2 million to its external debt stock, followed closely by Oyo ($35.7 million) and Kaduna ($33.6 million). Enugu State’s external obligations rose by $27.3 million, while Ogun added $21.8 million. Other notable increases included Katsina ($14.2 million), Borno ($8.7 million), Kwara ($6.7 million), Gombe ($5.8 million), Nasarawa ($5.7 million), Osun ($5.1 million), and Plateau ($5.1 million).

Smaller increments were recorded in states such as Akwa Ibom ($4.8 million), Ebonyi ($4.5 million), Abia ($3.8 million), Yobe ($3.4 million), Taraba ($3.1 million), and Kogi ($2.9 million). The lowest additions came from Adamawa ($2.1 million), Ondo ($2.0 million), Niger ($1.9 million), Sokoto ($1.2 million), Jigawa ($1.2 million), Kebbi ($1.1 million), Zamfara ($554,100), and Bayelsa ($438,000).

Despite these fresh borrowings, aggressive repayments by eleven states, including the Federal Capital Territory (FCT), Lagos, Edo, Rivers, and Bauchi, offset much of the increase, leaving the net rise in subnational external debt almost negligible. According to the DMO, these high-debt states accounted for a total reduction of $227 million in the first half of the year.

The broader context shows that Nigeria’s total public debt reached N152.39 trillion in Q2 2025, up from N149.38 trillion in Q1 2025. The top five indebted states alone accounted for N4.66 trillion of this total. Lagos State remains Nigeria’s most indebted subnational entity, carrying N2.496 trillion in total debt, split between N1.04 trillion domestic and N1.456 trillion external debt (calculated at an exchange rate of N1,400 per dollar).

Kaduna State ranks second with a cumulative debt of N1.507 trillion, including N585.72 billion domestic and N922.18 billion external. Rivers State follows with N327.55 billion (N74.05 billion domestic; N253.5 billion external), Delta State with N232.16 billion (N102.49 billion domestic; N129.67 billion external) and the FCT with N101.4 billion, making it the least indebted among the top five after partial repayments.

Commenting on the trends, a senior government official who craved anonymity noted, “The borrowing patterns highlight the balancing act states must perform: meeting infrastructure and development needs while ensuring debt sustainability. Aggressive repayments by some states demonstrate a growing awareness of responsible fiscal management.”

The data also signals a broader challenge for fiscal policy, as states with rising debt must navigate economic pressures, revenue fluctuations, and investment demands. Analysts warn that while borrowing is sometimes necessary to fund growth and development, continued reliance on external loans could expose states to currency and interest rate risks if not carefully managed.

As Nigeria continues to expand its economic agenda, experts note that effective debt management at both federal and state levels remains critical to ensuring financial stability, sustaining investor confidence, and promoting long-term development.