Lagos Tops State Debt Ranking As Domestic Obligations Hit N4.52trn

Lagos State retained its position as Nigeria’s most indebted state in domestic obligations, with its debt stock standing at N1.21tn as of March 31, 2026, accounting for more than a quarter of the N4.52tn combined domestic debt owed by the country’s 36 states and the Federal Capital Territory (FCT).

The latest data released by the Debt Management Office (DMO) showed that Lagos, the FCT and Rivers State collectively accounted for N1.96tn, representing 43.27 per cent of the total domestic debt stock of the states and the FCT at the end of the first quarter of 2026.

The figures underscore the concentration of domestic borrowing among a relatively small number of subnational governments, with Lagos alone accounting for approximately 26.6 per cent of the total.

The FCT ranked second with a domestic debt stock of N389.88bn, while Rivers State followed with N362.43bn.

Delta State occupied the fourth position with N213.85bn, followed by Ogun State with N200.75bn, making the five largest debtors responsible for a significant share of the total domestic debt stock.

The DMO data also revealed a wide disparity in debt levels across the states, with several states recording domestic obligations below N20bn.

Jigawa State had the lowest domestic debt stock at N1.60bn, followed by Ondo State with N7.31bn and Anambra State with N9.62bn.

Ebonyi State recorded N12.30bn, while Katsina and Kebbi had N12.69bn and N14.58bn, respectively.

At the aggregate level, the domestic debt stock of Nigeria’s 36 states and the FCT increased by N163.25bn, or approximately 3.7 per cent, from N4.36tn at the end of December 2025 to N4.52tn by March 2026.

The increase reflects changes in the borrowing positions of individual states during the quarter, although the movement was mixed, with some jurisdictions recording significant increases while several major debtors reduced their outstanding obligations.

The FCT recorded the most significant increase during the period, with its domestic debt more than doubling from N188.86bn in December 2025 to N389.88bn by March 2026.

The increase amounted to N201.02bn within the three-month period.
Edo State also recorded a substantial rise in its domestic obligations, increasing from N91.18bn to N172.37bn.

Borno State’s domestic debt rose from N42.64bn to N88.44bn, while Yobe State increased its debt stock from N81bn to N98.59bn.

The increases recorded by these states helped drive the overall rise in the combined domestic debt stock during the quarter.

However, some of the states with the largest debt burdens recorded reductions between December 2025 and March 2026.

Lagos marginally reduced its domestic debt from N1.22tn at the end of 2025 to N1.21tn by March 2026.

Rivers State also recorded a decline, with its domestic debt falling from N378.81bn to N362.43bn, a reduction of N16.38bn.

Delta State’s debt stock declined from N248.83bn to N213.85bn, while Ogun State reduced its domestic obligations from N227.47bn to N200.75bn.

The Q4 2025 DMO data had put the combined domestic debt of the states and the FCT at N4.36tn, indicating that the aggregate stock increased by N163.25bn during the first quarter of 2026.

The latest figures highlight the divergent fiscal positions of Nigeria’s subnational governments, with some states carrying significantly larger domestic obligations than others.

For the major debtors, the size of outstanding domestic obligations remains an important consideration for fiscal management, particularly as state governments seek to balance debt servicing requirements with spending on infrastructure, social services and other development priorities.

The concentration of more than 43 per cent of total domestic state debt in Lagos, the FCT and Rivers also points to the uneven distribution of borrowing across the federation.

While Lagos remains the dominant debtor in absolute terms, the increase recorded by the FCT during the quarter was the most significant movement among the major jurisdictions, substantially narrowing the gap between the capital territory and Rivers State.

The DMO’s quarterly data provides a detailed picture of the outstanding domestic liabilities of the 36 states and the FCT and serves as an important indicator of the evolving fiscal position of Nigeria’s subnational governments.