At least 10 Nigerian states collectively increased their domestic debt by N417.7bn year-on-year, despite a significant rise in revenue allocations from the Federation Account Allocation Committee, a review of official data has shown.
An analysis of the Debt Management Office’s quarterly reports on subnational debt reveals that Rivers, Enugu, Niger, Taraba, Bauchi, Benue, Gombe, Edo, Kwara, and Nasarawa raised their combined debt stock from N884.9bn in Q1 2024 to N1.3tn in Q1 2025.
This represents a 47.2 per cent year-on-year increase, raising questions about fiscal prudence and the long-term sustainability of borrowing at the state level.
The data also shows that the 10 states’ combined domestic debt increased quarter-on-quarter, from N1.26tn in Q4 2024 to N1.30tn in Q1 2025, an additional N42.3bn, representing a 3.4 per cent increase in just three months.
This rise in indebtedness comes at a time when FAAC disbursements to states have improved considerably, fuelled by rising oil prices, gains from naira devaluation, and revenue freed up from petrol subsidy removal. However, the figures suggest that rather than leveraging these inflows to reduce debt, some states are borrowing even more. Rivers State topped the list with a domestic debt stock of N364.39bn as at Q1 2025, the highest among the 10 states.
While the figure remained unchanged from Q4 2024, it marked a year-on-year increase of N131.82bn or 56.7 per cent, compared to N232.58bn in Q1 2024.
Enugu State’s debt rose from N82.48bn in Q1 2024 to N188.42bn in Q1 2025, indicating a rise of N105.95bn or 128.4 per cent. Enugu also posted the most significant quarterly growth, adding N69.14bn between December 2024 and March 2025.
Niger State followed with an increase of N57.68bn year-on-year, moving from N86.07bn to N143.75bn, a 67 per cent rise. The state also saw a quarter-on-quarter rise of N3.02bn.
Taraba State more than doubled its domestic debt from N32.64bn to N82.93bn, indicating a year-on-year rise of N50.29bn or 154.1 per cent. Taraba’s quarterly debt also rose slightly by N1.54bn.
Bauchi State raised its debt stock from N108.39bn to N142.40bn, representing a year-on-year increase of N34.01bn or 31.4 per cent. However, quarter-on-quarter, Bauchi recorded a slight decline of N1.55bn.
Benue State posted a year-on-year increase of N13.09bn, from N116.73bn to N129.82bn, translating to an 11.2 per cent rise. The state also grew its debt by N7.25bn between Q4 2024 and Q1 2025.
Gombe State saw its debt rise from N70.81bn to N83.66bn year-on-year, adding N12.85bn or 18.1 per cent. However, the state reduced its debt from N89.24bn in Q4 2024, indicating a quarterly decline of N5.58bn.
Edo State, which owed N72.38bn in Q1 2024, increased its debt to N82.40bn by Q1 2025, a rise of N10.02bn or 13.8 per cent. On a quarter-on-quarter basis, Edo recorded the sharpest decline among the 10 states, reducing its debt by N30.60bn from the N113bn recorded in Q4 2024.
Kwara State increased its debt from N59.07bn to N60.10bn year-on-year, up by N1.03bn or 1.7 per cent. Its quarterly increase stood at N1.02bn.
Nasarawa State, the tenth on the list, increased its debt from N23.76bn to N24.73bn year-on-year, representing a rise of N968m or 4.1 per cent. Quarter-on-quarter, however, its debt dropped by N1.87bn. Altogether, the 10 states’ combined domestic debt of N1.30tn accounted for 33.67 per cent of the total N3.87tn domestic debt of all 36 states and the FCT as of Q1 2025.
This is a significant jump from the N884.9bn recorded by the same 10 states in Q1 2024 when they accounted for just 21.8 per cent of the national subnational debt stock. In Q4 2024, they made up 31.8 per cent of the total. The figures show that borrowing at the subnational level is increasingly concentrated in a small number of states. While the total domestic debt across all states and the FCT declined slightly from N4.07tn in Q1 2024 to N3.87tn in Q1 2025, the increase in the 10 states’ share suggests uneven fiscal behaviour.
However, it is important to note that Rivers State’s figure for Q1 2025 was as of December 2025, with the DMO report stating, “The Domestic Debt Stock for Rivers State was as at December 31, 2024”. The debt figure of Rivers for Q1 2024 was as of March 31, 2023, which explains the huge surge within that period and also shows that the state has been slow in releasing its latest figures to the DMO.
