Q1 2025 Debt Rankings: Nigerian States with the Biggest Loan Loads
Q1 2025 Debt Rankings: Nigerian States with the Biggest Loan Loads
As Nigeria continues to grapple with economic challenges in 2025, the financial health of its 36 states has come under renewed scrutiny. One of the most critical indicators of fiscal stability is public debt, and recent data from the Debt Management Office (DMO) paints a revealing picture of which states are carrying the heaviest financial burdens.
In the first quarter of 2025, several states saw a significant increase in their domestic and external debt profiles, raising concerns about sustainability, debt servicing capabilities, and long-term economic planning. Here’s a breakdown of the top 10 most indebted Nigerian states based on total public debt figures as of Q1 2025.
1. Lagos State
Total Debt: ₦1.46 trillion
Nigeria’s commercial powerhouse continues to top the debt charts. With massive infrastructure projects and a high dependence on internal revenue, Lagos’ debt profile remains the highest. However, its relatively strong IGR (Internally Generated Revenue) gives it some leverage in managing repayments.
2. Delta State
Total Debt: ₦470 billion
Fueled by recurring borrowing and a heavy wage bill, Delta State’s debt has been on a steady climb. Despite its oil wealth, poor financial management and over-reliance on federal allocations have made debt servicing increasingly difficult.
3. Rivers State
Total Debt: ₦450 billion
Another oil-rich state, Rivers has taken on more loans to fund infrastructure and social programs. Though revenues remain high, its rising debt is beginning to spark debate over long-term fiscal responsibility.
4. Akwa Ibom State
Total Debt: ₦420 billion
Known for its ambitious development agenda, Akwa Ibom’s mounting debt reflects years of capital-intensive projects. However, with declining oil receipts, the state is under pressure to manage its obligations more prudently.
5. Ogun State
Total Debt: ₦390 billion
Ogun’s proximity to Lagos has spurred industrial growth, but the accompanying infrastructure demands have pushed the state’s borrowing higher. While its IGR is growing, debt repayments are beginning to weigh on the budget.
6. Bayelsa State
Total Debt: ₦350 billion
Despite being one of Nigeria’s richest oil-producing states, Bayelsa faces challenges in managing its debt. The state’s small population hasn’t translated into efficient public service delivery, and its rising debt is a concern for fiscal watchdogs.
7. Imo State
Total Debt: ₦325 billion
Imo’s debt profile surged in recent years as the state ramped up spending on infrastructure and education. However, the lack of robust IGR growth raises questions about the sustainability of its current borrowing trajectory.
8. Kano State
Total Debt: ₦310 billion
Kano, the most populous northern state, has relied heavily on borrowing to fund agriculture, healthcare, and education. Despite its strategic importance, weak IGR has made debt repayment a growing challenge.
9. Cross River State
Total Debt: ₦290 billion
Cross River’s debts are largely driven by legacy loans and ambitious past projects like the proposed superhighway. With limited revenue, the state’s debt continues to be a major obstacle to financial recovery.
10. Kaduna State
Total Debt: ₦280 billion
Known for taking external loans to drive development, Kaduna’s debt has grown steadily over the years. Its efforts in education and urban renewal have come at a cost, and balancing repayments with social needs remains a key concern.
The Bigger Picture
Nigeria’s debt landscape continues to evolve amid changing economic conditions. While debt isn’t inherently bad—especially when used for productive investments—poor transparency, low revenue generation, and heavy reliance on federal allocations make rising debt profiles a red flag in many states.
Fiscal analysts are urging state governments to prioritize internal revenue generation, cut down on recurrent expenditures, and adopt more prudent borrowing practices. With the 2025 fiscal year still in its early stages, how states manage their growing debt portfolios will significantly influence their developmental outcomes.
Conclusion
As Q1 2025 comes to a close, the debt rankings serve as a sobering reminder of the financial pressures Nigerian states face. With tighter global financial conditions and increasing public scrutiny, the next few quarters will be crucial in determining whether these states can rein in their loan loads—or spiral
deeper into unsustainable borrowing.
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