Nigeria’s 36 states and the Federal Capital Territory owed a combined ₦4.59 trillion in domestic debt at the end of June 2026, with about 70 per cent of the total concentrated among only ten sub-national governments.
New figures published by the Debt Management Office show that the combined stock rose by ₦67.57 billion, or 1.49 per cent, from ₦4.52 trillion at the end of March. Compared with June 2025, the total increased by ₦627.35 billion, equivalent to 15.83 per cent.
The quarterly rise appears modest in aggregate, but the underlying figures show markedly different borrowing patterns across the federation. Several states reduced their liabilities while Delta, Edo and the FCT recorded some of the largest changes over the preceding year.
Lagos remained Nigeria’s biggest sub-national domestic debtor, with liabilities of ₦1.195 trillion. That was about 26 per cent of the total owed by all states and the FCT.
The state’s debt fell slightly from approximately ₦1.21 trillion in March, but remained 14.78 per cent above its June 2025 level of ₦1.041 trillion. Lagos’s large economy and infrastructure programme give it greater revenue-generating capacity than many states, but the size of its obligations still makes debt management and project returns matters of national interest.
Delta moved into second place after its domestic debt climbed from ₦213.85 billion in March to ₦369.30 billion in June. The increase of roughly 72.69 per cent in a single quarter was among the sharpest in the data. Its debt was also 80.44 per cent higher than the ₦204.67 billion recorded one year earlier.
The FCT ranked third with ₦358.79 billion. Although this represented a 7.97 per cent reduction from March, it was more than four times the ₦71.04 billion recorded in June 2025.
Rivers followed with ₦354.64 billion, down from ₦362.43 billion in March and also below its year-earlier level. Edo’s domestic debt, by contrast, rose by 24.69 per cent during the quarter to ₦214.93 billion. It was 167.6 per cent higher than the ₦80.32 billion reported in June 2025.
Ogun’s debt declined by 5.83 per cent during the quarter to ₦189.05 billion, although it remained about 16 per cent above its June 2025 level. Bauchi recorded ₦157.35 billion, Niger ₦140 billion, Cross River ₦130.01 billion and Benue ₦112.32 billion.
Together, the ten largest debtors owed approximately ₦3.22 trillion, or 70.2 per cent of the sub-national domestic total. Their combined liabilities increased by about ₦731 billion over the 12 months to June.
The concentration matters because borrowing is not inherently harmful. States can use debt to build roads, schools, hospitals, power infrastructure and water systems whose economic and social benefits last for many years. Financing long-lived projects through borrowing can spread their cost across the generations that benefit from them.
The risk arises when loans are used for recurrent expenditure, poorly selected projects or programmes that do not generate sufficient economic value. Debt-service payments can then absorb money needed for wages and essential public services, particularly in states that depend heavily on monthly allocations from the Federation Account.
Residents therefore need more than headline debt totals. They require clear disclosure of why each loan was obtained, its interest rate and maturity, the projects financed and the repayment burden on future budgets.
The figures also need to be considered alongside each state’s internally generated revenue, statutory allocations and total expenditure. A large debt can be manageable for a government with strong and predictable income, while a smaller obligation may create greater pressure for a state with a weak revenue base.
Exchange-rate risk is less direct for domestic liabilities than for foreign loans, but higher interest costs and short repayment periods can still strain state finances. Rising debt can also reduce the room available to respond to emergencies or undertake new development projects.
The Debt Management Office’s publication allows citizens, legislatures and investors to compare states, but the next level of accountability lies with individual governments. State assemblies should scrutinise borrowing requests and debt-service provisions, while auditors should track whether funds reach the projects for which they were approved.
Governors whose debt stocks increased sharply should explain the change and identify the assets or services being financed. Governments that reduced their debts should also disclose whether the decline resulted from repayments, restructuring or other accounting movements.
For ordinary Nigerians, the test is ultimately practical. Borrowing should translate into better transport, reliable public services, productive investment and broader economic opportunity. Higher liabilities without visible results leave taxpayers with repayment obligations but little lasting benefit.
Podium News will continue monitoring subsequent Debt Management Office releases and the budget disclosures of the states recording the largest increases. Readers can also consult the DMO’s sub-national debt tables and their state budget documents to assess how borrowing is being used.
