Lagos Tops Nigeria’s Most Indebted States List Despite National Drop in Subnational Debt

• Nigeria’s 36 states slashed their debt by 32.32% in 2024, but Lagos still holds a staggering N900.19 billion in liabilities.

• Rivers and Enugu bucked the national trend, recording steep increases tied to post-election projects and aggressive budgets.

• Seven of the top 10 most indebted states managed significant debt reduction through IGR growth, restructuring, or reduced borrowing.

Despite a nationwide decline in state-level debt, Lagos State remains Nigeria’s most indebted subnational entity with a debt stock of N900.19 billion as of December 2024.

The state’s figure—though 14.16% lower than its 2023 level of N1.05 trillion—highlights its continued reliance on large-scale borrowing to fund massive infrastructure projects.

New figures show that Nigeria’s 36 states collectively cut their domestic debt stock by N1.89 trillion, reducing from N5.86 trillion in 2023 to N3.97 trillion in 2024.

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The sharp contraction reflects a national shift toward fiscal discipline, improved IGR generation, and a cautious borrowing culture.

Analysts also link the decline to naira devaluation discouraging foreign debt and increased dependence on Public-Private Partnerships (PPPs) and concessional funding.

Among the states with the highest debt burdens, Rivers State came second with N364.39 billion, a dramatic 56.67% year-on-year increase, driven by capital-intensive projects following the 2023 elections.

Ogun and Delta States, in contrast, posted debt declines of 23.98% and 46.55%, respectively—showing positive fiscal trends tied to improved revenue and strategic loan refinancing.

Enugu State, now the 10th most indebted, saw a notable 29.36% surge to N119.28 billion, fuelled by Governor Peter Mbah’s N521.5 billion “Budget of Disruptive Economic Growth”.

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This expansionist budget model prioritised infrastructure and education but triggered concerns about long-term sustainability.

The full list of Nigeria’s top 10 most indebted states in 2024 includes:

1. Lagos – N900.19 billion
2. Rivers – N364.39 billion
3. Ogun – N211.86 billion
4. Delta – N199.58 billion
5. Bauchi – N143.95 billion
6. Niger – N140.74 billion
7. Imo – N126.14 billion
8. Benue – N122.57 billion
9. Akwa Ibom – N122.19 billion
10. Enugu – N119.28 billion

While several states such as Akwa Ibom, Benue, and Imo made major strides in slashing their debt through improved oil earnings, digital tax reform, and reduced borrowing, others like Rivers and Enugu are raising fiscal red flags by expanding their debt profiles.

Experts warn that while some debt is necessary for capital development, unchecked borrowing—especially without clear revenue-backed repayment plans—could strain public finances and limit long-term growth.