Nigeria’s States Deepen External Borrowing as Debt Hits $5.68bn

Chineye Egesi Chineye Egesi May 04, 2026 3 min read
Nigeria’s States Deepen External Borrowing as Debt Hits $5.68bn

Nigeria’s subnational external debt profile expanded significantly in 2025, with 32 states and the Federal Capital Territory (FCT) collectively increasing their foreign obligations by $944.12 million, according to newly analysed data from the Debt Management Office (DMO).

A closer examination of the figures shows that the total external debt stock for states and the FCT climbed from $4.80 billion as of December 31, 2024, to $5.68 billion by December 31, 2025. This represents a year-on-year increase of $884.66 million, translating to a growth rate of 18.43 percent.

However, the overall increase would have been even more pronounced if not for debt reductions recorded by a small number of states.

According to analysis by Nairametrics, four states, Edo, Rivers, Anambra, and Bayelsa, collectively reduced their external debt by $59.46 million during the same period. This partial offset explains the difference between the gross increase of $944.12 million and the net increase of $884.66 million.

The data highlights a widening reliance on external borrowing by most subnational governments, likely driven by fiscal pressures, infrastructure financing needs, and constrained internally generated revenue.

Without the modest debt repayments by the four states, the total external debt burden of states and the FCT would have approached a $1 billion increase within a single year.

This trend raises important considerations about debt sustainability at the subnational level, especially in the context of exchange rate volatility and rising global interest rates, both of which can significantly increase the cost of servicing external obligations.

Nigeria FCT DMO

Share this post

Link copied. Paste it on Instagram.

Related Posts

OPINION: Why I Find It Difficult to Celebrate Democracy Day in Nigeria
Admin User

Admin User

Jun 12, 2026

OPINION: Why I Find It Difficult to Celebrate Democracy Day in Nigeria

As Nigerians marked Democracy Day, I found myself reflecting on the state of our nation and asking a simple question: what exactly are many citizens celebrating?

Why Investors Are Turning Away from Africa’s Biggest Economies
Uchechi Okporie

Uchechi Okporie

Jun 12, 2026

Why Investors Are Turning Away from Africa’s Biggest Economies

One of the major reasons behind the weak economy in Nigeria and many other African countries is the lack of strong industries and limited investment opportunities. In many developed countries, industries play a very important role in creating jobs, producing goods, and strengthening the economy. However, in most parts of Africa, there are still not enough functioning industries to support large-scale economic growth.

First Batch of Nigerians From South Africa to Arrive Ikeja Airport Thursday Morning - Foreign Affairs Minister Says
Admin User

Admin User

Jun 11, 2026

First Batch of Nigerians From South Africa to Arrive Ikeja Airport Thursday Morning - Foreign Affairs Minister Says

The first batch of repatriation of Nigerians from South Africa will touch the Nigerian International Airport, Ikeja on Thursday morning, being June 11, 2026, Next Africa Daily can report

Where Is Nigeria Heading? Ebonyi Resident Cries Out Over Rising Hardship
Uchechi Okporie

Uchechi Okporie

Jun 10, 2026

Where Is Nigeria Heading? Ebonyi Resident Cries Out Over Rising Hardship

The economic situation in Nigeria has continued to generate concern among citizens, with many questioning the direction in which the country is heading. One of such voices is that of Divine Emmanuel, a resident of Ishieke in Ebonyi State, who spoke passionately about the hardships facing ordinary Nigerians.

JAPA DREAMS: Why Many Nigerian Students See Their Future Beyond Nigeria
Admin User

Admin User

Jun 09, 2026

JAPA DREAMS: Why Many Nigerian Students See Their Future Beyond Nigeria

Students meet in the classrooms, hostels, cafeteria and leisure areas of Delta State University, Abraka, every week to chat about lectures, assignments, relationships and the future. Yet one issue keeps coming up if it is not in the conversation in every lecture, in every faculty, in every department, it is in the conversation on leaving Nigeria

Why The Fight Against Kidnapping Must Remain Nigeria's Topmost Priority
Uchechi Okporie

Uchechi Okporie

Jun 09, 2026

Why The Fight Against Kidnapping Must Remain Nigeria's Topmost Priority

Nigeria is currently in the throes of kidnapping. In the villages, cities and suburbs, there's fear of kidnapping everywhere. There are many kidnap cases which are not known to the media. Friends and relations of kidnapped victims are daily weeping over their relations languishing in the dens of kidnappers. Many are being made to borrow huge money to pay for random which will take them years to pay back. How did we get here? What actually went wrong with Nigeria? Who did Nigeria offend? UCHE OKPORIE writes on the pains and challenges of kidnapping in Nigeria and what the government needs to do very urgently

Students in Ebonyi State Call for Better Electricity, Say Businesses Are Failing Over Poor Power Supply
Uchechi Okporie

Uchechi Okporie

Jun 08, 2026

Students in Ebonyi State Call for Better Electricity, Say Businesses Are Failing Over Poor Power Supply

Residents of Ishieke community in Ebonyi State, Nigeria have appealed to the government and electricity authorities to improve power supply in the area, saying the current situation is making life difficult for students, business owners, and families.

As 2027 Nears, Nigerian Citizens Are Asking Hard Questions
Uchechi Okporie

Uchechi Okporie

Jun 05, 2026

As 2027 Nears, Nigerian Citizens Are Asking Hard Questions

Nigeria is a country that has everything it takes to do well, but many things are not working the way they should. If you look at Nigerians, you'll see strong, hardworking and patient citizens.

Get new post alerts

Allow browser notifications and we’ll alert you when a new story is published while this site is open.