20 States Pile Up ₦458 Billion Debt Despite Rising Revenues
By FIDELUS ZWANSON
AT least 20 state governments borrowed a combined ₦458 billon in the first half of 2025, despite receiving record allocations from the Federation Account, an investigation has revealed.
Data reviewed from budget reports and FAAC disbursements show states collected ₦3.43 trillion between January and June 2025, a 43% jump from the ₦2.40 trillion received in the same period of 2024. Yet, they collectively spent ₦235.6 billion servicing external debt, up 68% year-on-year, and still resorted to fresh loans.
Oyo State led the borrowing spree with ₦93.4 billion in domestic loans, followed by Kaduna (₦62 billion foreign), Lagos (₦50 billion domestic), and Bauchi (₦26.3 billion split between local and external lenders). Others on the debt roll include Zamfara, Katsina, Gombe, Kebbi, Jigawa, Borno, Taraba, Sokoto, Niger, Kwara, Ekiti, Ondo, Abia, Ebonyi, and Enugu.
Economists warn the trend exposes states to currency risks and fiscal shocks. With most debts dollar-denominated, every naira depreciation inflates repayment costs, squeezing budgets for health, education, and infrastructure.
Prof. Taiwo Owoeye of Ekiti State University cautioned that rising dependence on foreign loans could erode financial autonomy, effectively mortgaging future federal allocations and undermining states’ ability to deliver essential services.
