…Imo, Oyo, Kaduna, Enugu, Ogun lead new foreign borrowing
Twenty-six Nigerian states collectively expanded their external debt profiles in the first half of 2025, adding a combined $239 million in new foreign borrowings, according to recently released data from the Debt Management Office (DMO). The report highlights the varied approaches of subnational governments toward foreign debt, revealing that while several states pushed up their external loan commitments, others reduced their liabilities through aggressive repayments.
The DMO disclosed that Nigeria’s overall external debt stood at $46.98 billion, with states accounting for $4.812 billion—a marginal increase from $4.8 billion recorded at the start of the year. The relatively modest growth in state-level foreign debt reflects a balancing trend, where fresh loans were nearly offset by repayments from heavily indebted states.
Despite the slight net increase, the report shows a clear divergence in borrowing patterns across the federation. Some states significantly increased external obligations in the first six months of the year, while others made strong progress in paying down their debts.
States with the Largest New Borrowings
Five states represent the majority of the additional $239 million in external loans taken during the review period:
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Imo State registered the highest increase, adding $36.2 million, marking the sharpest growth among all subnationals.
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Oyo State followed closely with an additional $35.7 million, reflecting ongoing infrastructure and development-focused borrowing.
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Kaduna State increased its foreign debt by $33.6 million, continuing a multi-year pattern of accessing external financing for development programmes.
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Enugu State raised its foreign obligations by $27.3 million, while
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Ogun State expanded its debt profile by $21.8 million in the same period.
Beyond the top five, more moderate borrowing was recorded from other states. These include Katsina, which added $14.2 million, Borno with $8.7 million, and Kwara, Gombe, Nasarawa, Osun, and Plateau, which each expanded their debt stock by between $5.1 million and $6.7 million.
Additional states such as Akwa Ibom, Ebonyi, Abia, Yobe, Taraba, and Kogi posted smaller increments ranging between $2.9 million and $4.8 million.
States with the Lowest Increase
At the lower end of the spectrum, several states recorded minimal additions to their foreign debt portfolios:
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Adamawa added $2.1 million,
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Ondo, $2 million,
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Niger, $1.9 million, and
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Sokoto, $1.2 million.
The least additions came from Jigawa and Kebbi, each adding just over $1 million, while Zamfara and Bayelsa saw the smallest increases at $554,100 and $438,000, respectively.
Debt Reductions Offset Borrowing
Despite new loans from 26 states, the DMO noted that 11 states and the Federal Capital Territory (FCT) reduced their external debt through repayments, leading to a near-stable total national subnational debt figure. The largest reductions came from Lagos, Edo, Rivers, and Bauchi, which collectively accounted for $227 million in repayments.
This highlights the continued influence of high-debt states in shaping Nigeria’s overall debt dynamics, with repayments by these governments counterbalancing new borrowings from others.
Top Five Most Indebted States
As of the second quarter of 2025, Nigeria’s total public debt reached N152.39 trillion, up from N149.38 trillion in Q1. The five most indebted states accounted for N4.66 trillion of this figure.
Lagos State remains the country’s most indebted subnational, with total liabilities of N2.496 trillion—comprised of N1.04 trillion in domestic debt and N1.456 trillion in external borrowings, based on an exchange rate of N1,400/$1. Lagos’ debt reflects its economic size and its role as Nigeria’s commercial and financial hub.
Second on the list is Kaduna State, with total debt of N1.507 trillion, broken into N585.72 billion domestic and N922.18 billion external.
Rivers State comes third with N327.55 billion, followed by Delta State, with N232.16 billion, split between domestic and external liabilities.
The Federal Capital Territory (FCT) completes the top five with a total debt of N101.4 billion, having reduced its external obligations during the period.
Emmanuel Bassey is a Financial Expert that has worked in the Banking and Finance Industry for over 15+ years across different banks in Nigeria
