Nigeria’s 36 states and the Federal Capital Territory (FCT) recorded a significant rise in external debt in 2025, according to newly released data from the Debt Management Office (DMO). The figures show that most states increased their borrowing from foreign sources, pushing the total debt higher compared to the previous year.
By the end of 2025, the combined external debt of the states and the FCT stood at $5.68 billion. This marks an increase from $4.80 billion recorded at the end of 2024. In simple terms, this is a rise of $884.66 million, representing an 18.43% increase within one year.
However, the total increase could have been even higher. While 32 states and the FCT added about $944.12 million to their debt, four states—Edo, Rivers, Anambra, and Bayelsa—reduced their debt by a total of $59.46 million. This helped to slightly lower the overall increase.
In terms of participation, 33 out of the 37 subnational governments increased their debt, meaning nearly 90% of them borrowed more in 2025. Only about 10% managed to cut down their debt levels.
A closer look at the type of loans shows that most of the debt came from multilateral institutions such as international financial organizations. These loans made up $5.25 billion, which is over 92% of the total debt. Bilateral loans, which come from agreements between countries, accounted for $430.96 million or about 7.6%. There were no records of commercial loans, Eurobonds, or similar borrowing methods among the states during this period.
Some states recorded especially large increases. Katsina nearly doubled its debt, adding over $100 million. Niger and Kogi also saw major increases, with their debts rising by more than $70 million and $66 million respectively. Plateau recorded the highest growth rate, with its debt increasing by over 187%, even though its total amount remained lower than some bigger states.
Other states like Kaduna, Gombe, Imo, Sokoto, Oyo, and Bauchi also saw notable increases in their debt levels. These rises reflect growing reliance on external funding for development projects and government spending.
On the other hand, four states made efforts to reduce their debt. Edo recorded the largest drop, cutting over $29 million. Rivers followed closely with a reduction of about $28 million. Anambra and Bayelsa also recorded small decreases.
Despite these reductions, the overall trend shows that most states are borrowing more rather than reducing their obligations.
Looking at the bigger picture, Nigeria’s total public debt reached N159.28 trillion by the end of 2025. The states and FCT contributed about 12% of the country’s total external debt, while the Federal Government held the majority share.
Among all states, Lagos remained the most indebted externally, with a total of $1.17 billion, although its increase was minimal. Kaduna and Edo followed as the second and third most indebted states respectively.
In summary, the data highlights a growing dependence on external borrowing by Nigerian states, raising concerns about debt sustainability and future financial stability.
