At least 10 Nigerian states collectively increased their domestic debt by ₦417.7 billion year-on-year, despite a significant rise in revenue allocations from the Federation Account Allocation Committee (FAAC), 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 ₦884.9 billion in Q1 2024 to ₦1.3 trillion 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 ₦1.26 trillion in Q4 2024 to ₦1.30 trillion in Q1 2025, an additional ₦42.3 billion, 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 ₦364.39 billion 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 ₦131.82 billion or 56.7 per cent, compared to ₦232.58 billion in Q1 2024.
Enugu State’s debt rose from ₦82.48 billion in Q1 2024 to ₦188.42 billion in Q1 2025, indicating a rise of ₦105.95 billion or 128.4 per cent. Enugu also posted the most significant quarterly growth, adding ₦69.14 billion between December 2024 and March 2025.
Niger State followed with an increase of ₦57.68 billion year-on-year, moving from ₦86.07 billion to ₦143.75 billion, a 67 per cent rise. The state also saw a quarter-on-quarter rise of ₦3.02 billion.
Taraba State more than doubled its domestic debt from ₦32.64 billion to ₦82.93 billion, indicating a year-on-year rise of ₦50.29 billion or 154.1 per cent. Taraba’s quarterly debt also rose slightly by ₦1.54 billion.
Bauchi State raised its debt stock from ₦108.39 billion to ₦142.40 billion, representing a year-on-year increase of ₦34.01 billion or 31.4 per cent. However, quarter-on-quarter, Bauchi recorded a slight decline of ₦1.55 billion.
Benue State posted a year-on-year increase of ₦13.09 billion, from ₦116.73 billion to ₦129.82 billion, translating to an 11.2 per cent rise. The state also grew its debt by ₦7.25 billion between Q4 2024 and Q1 2025.
Gombe State saw its debt rise from ₦70.81 billion to ₦83.66 billion year-on-year, adding ₦12.85 billion or 18.1 per cent. However, the state reduced its debt from ₦89.24 billion in Q4 2024, indicating a quarterly decline of ₦5.58 billion.
Edo State, which owed ₦72.38 billion in Q1 2024, increased its debt to ₦82.40 billion by Q1 2025, a rise of ₦10.02 billion or 13.8 per cent. On a quarter-on-quarter basis, Edo recorded the sharpest decline among the 10 states, reducing its debt by ₦30.60 billion from the ₦113 billion recorded in Q4 2024.
Kwara State increased its debt from ₦59.07 billion to ₦60.10 billion year-on-year, up by N1.03bn or 1.7 per cent. Its quarterly increase stood at ₦1.02 billion.
Nasarawa State, the tenth on the list, increased its debt from ₦23.76 billion to ₦24.73 billion year-on-year, representing a rise of ₦968 million or 4.1 per cent. Quarter-on-quarter, however, its debt dropped by ₦1.87 billion.
Altogether, the 10 states’ combined domestic debt of ₦1.30 trillion accounted for 33.67 per cent of the total ₦3.87 trillion 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 ₦4.07 trillion in Q1 2024 to ₦3.87 trillion 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.
In contrast, Enugu’s rapid debt accumulation—more than doubling in one year—has raised eyebrows. While it is unclear what projects the new borrowings are financing, the scale of the increase demands scrutiny.
The PUNCH