The domestic debt of Nigeria’s 36 states and the Federal Capital Territory (FCT) increased by N198.96 billion within three months.
This is according to the latest subnational debt report from the Debt Management Office (DMO).
The total domestic debt of states and the FCT rose by 5% from N4.068 trillion in March 2024 to N4.267 trillion by June 2024.
Nairametrics observed variations in debt levels across the states, with some recording significant increases while others showed marginal changes or reductions.
While some states, such as Lagos, Delta, and Ogun, successfully reduced their debt burdens, others, like Rivers and Niger, recorded sharp increases.
Below is a detailed analysis of the top 10 Nigerian states with the highest domestic debt as of Q2 2024:.
10. Benue
Benue State, with a domestic debt stock of N116.88 billion in Q2 2024, showed a minimal increase from N116.73 billion in Q1 2024.
This represents a difference of N144.24 million. Known as the “Food Basket of the Nation,” Benue’s debt stability suggests a conservative approach to borrowing, likely driven by its commitment to maintaining fiscal discipline.
The negligible increase in debt may reflect efforts to fund ongoing projects without substantially increasing the state’s financial burden, highlighting prudent fiscal management.
9. Akwa Ibom
Akwa Ibom, a major oil-producing state, reduced its domestic debt from N142.93 billion in Q1 2024 to N132.87 billion in Q2 2024.
This marks a significant decline of 7%, with a reduction of N10.06 billion. The decrease suggests a deliberate effort by the state to manage its debt portfolio amidst high expenditure demands.
8. Niger
Niger State experienced a sharp increase in its domestic debt, rising from N86.07 billion in Q1 2024 to N146.29 billion in Q2 2024. This represents a 70% surge, amounting to an additional N60.22 billion in debt.
This significant rise may be tied to ambitious infrastructural or developmental projects, as Niger plays a crucial role in housing Nigeria’s hydroelectric power stations and agricultural investments.
However, the steep increase raises concerns about the state’s ability to manage such debt sustainably, particularly if revenue streams are not robust enough to offset the growing financial obligations.
7. Bauchi
Bauchi State’s domestic debt rose from N108.39 billion in Q1 2024 to N147.23 billion in Q2 2024, reflecting a 36% increase and an additional N38.84 billion in borrowing.
This rise suggests that the state has been heavily investing in infrastructural development and social welfare programs. Known for its agricultural economy, Bauchi may need to improve its internally generated revenue (IGR) mechanisms to balance this growing debt.
While borrowing to fund development is justifiable, such a significant increase emphasizes the need for careful financial planning to avoid overdependence on loans.
6. Cross River
Cross River’s domestic debt marginally decreased from N156.17 billion in Q1 2024 to N155.49 billion in Q2 2024, representing a negligible drop of N682.14 million.
This stabilization in debt highlights the state’s efforts to maintain fiscal balance despite its ambitious tourism and industrialization projects.
5. Imo
Imo State reduced its domestic debt from N163.06 billion in Q1 2024 to N159.19 billion in Q2 2024, marking a 2% decrease and a reduction of N3.87 billion.
This decline indicates fiscal discipline amidst the state’s ongoing infrastructural needs and social investments.
4. Ogun
Ogun State, known for its industrial hubs and proximity to Lagos, reduced its domestic debt from N221.22 billion in Q1 2024 to N211.13 billion in Q2 2024.
This represents a 5% decrease, amounting to N10.09 billion in reduced debt. The state’s strategic debt reduction aligns with its focus on attracting investments and expanding its industrial base.
3. Delta
Delta State recorded one of the most significant reductions in debt, cutting its domestic debt from N334.90 billion in Q1 2024 to N304.54 billion in Q2 2024. This 9% reduction translates to a decrease of N30.36 billion. As an oil-rich state, Delta’s ability to significantly reduce its debt reflects efforts to improve financial management amidst unstable oil revenues.
2. Rivers
Rivers State saw a sharp 67% increase in its domestic debt, rising from n232.58 billion in Q1 2024 to N389.20 billion in Q2 2024. This massive increase, amounting to N156.62 billion, makes it the largest absolute increase among the top 10 states.
Rivers, a major oil-producing state, may have borrowed heavily to fund large-scale infrastructural projects or economic diversification initiatives.
While these investments are likely aimed at boosting economic output, the significant rise in debt raises questions about the state’s ability to manage its growing financial obligations sustainably.
1. Lagos
Lagos, Nigeria’s commercial hub, maintained its position as the state with the highest domestic debt, despite reducing its debt from N929.41 billion in Q1 2024 to N885.99 billion in Q2 2024.
This represents a 5% decrease, amounting to N43.42 billion. The reduction highlights Lagos’ strong revenue-generating capacity, supported by taxes, levies, and robust business activities.
