…Ogun Ranks Fourth Most Indebted With ₦538.92bn Debt Stock
…Lagos Tops Debt Chart With ₦2.9tn, Osun Gulps ₦100.17bn On Debt Servicing
…Oyo’s Expenditure Soars 118.7%, Enugu Records 125.9% IGR Growth
…Ebonyi Battles ₦43.32bn Contractor Arrears As States Struggle Despite FAAC Windfall
Daud Olatunji
State governments across Nigeria are facing mounting fiscal pressure as their combined debt stock climbed to ₦11.67tn in 2025, raising fresh concerns about their capacity to meet development obligations despite increased revenue inflows from the Federation Account.
The alarming figures are contained in the 2026 State of States Report released by BudgIT, which assessed the 2025 fiscal performance of 35 states, excluding Rivers State over inadequate financial documentation.
The report disclosed that the combined debt of the 35 states increased by 10.41 per cent from ₦10.57tn recorded in 2024 to ₦11.67tn in 2025, exposing the growing financial burden confronting subnational governments.
The rising debt stock, coupled with outstanding payments to contractors, pensioners and retirees, has intensified questions about the quality of public spending, borrowing decisions and the ability of state governments to translate increased revenue into improved living conditions.
Lagos State emerged as the most indebted, with a debt stock of approximately ₦2.9tn, while Ogun State ranked fourth among the most indebted states with liabilities of ₦538.92bn.
The report also identified significant debt-servicing pressures across the federation, with states collectively spending about ₦1.99tn on servicing debts in 2025.
Although the aggregate debt-servicing expenditure declined from ₦2.12tn in 2024, the figures revealed that several states continued to devote substantial portions of their revenues to meeting debt obligations, leaving fewer resources for other public services.
Osun State recorded one of the most troubling situations, spending ₦100.17bn on debt servicing, representing 28.6 per cent of its total revenue.
Lagos also spent ₦479.13bn on debt servicing, the highest among the assessed states, while Oyo paid ₦182.96bn, representing a sharp increase from ₦45.02bn in the preceding year.
