Lagos Debt Soars to ₦2.9trn, Towers over other States’ Borrowing

By Kazeem Ugbodaga

Lagos State’s total debt profile has risen to approximately ₦2.9 trillion after combining its domestic and external obligations, reinforcing its position as Nigeria’s most indebted subnational government.

Latest figures from the Debt Management Office (DMO) show that Lagos recorded domestic debt of ₦1.219 trillion as at December 31, 2025, the highest among all states and the Federal Capital Territory (FCT).

In addition, the state’s external debt stood at $1.174 billion. Using the Central Bank of Nigeria’s official exchange rate of about ₦1,435 per dollar, this translates to roughly ₦1.68 trillion.

When combined, Lagos’ total debt profile is estimated at about ₦2.9 trillion, placing it far ahead of other states in overall exposure.

The data shows a wide gap between Lagos and other major borrowing states. Rivers State, the next highest in domestic debt, posted ₦378.8 billion, while Delta recorded ₦248.8 billion.

On the external side, Lagos also leads significantly, with Kaduna following distantly at about $684.29 million, while Cross River and Bauchi recorded $222.92 million and $220.57 million respectively.

Overall, total domestic debt for states and the FCT stood at ₦4.36 trillion, meaning Lagos alone accounts for a substantial portion of subnational borrowing in Nigeria.

Similarly, the total external debt of states and the FCT was put at $5.68 billion, with Lagos contributing a significant share of that figure.

Lagos’ large debt profile is attributed to its aggressive infrastructure financing strategy, driven by its status as Nigeria’s commercial hub. The state has consistently borrowed to fund major projects in transportation, housing, and urban development.

However, the size of the debt has also raised concerns about sustainability, particularly as debt servicing obligations continue to grow amid broader economic pressures.

Despite this, Lagos maintains one of the strongest internally generated revenue bases in the country, which provides some cushion for managing its liabilities.

The DMO figures highlight a growing imbalance in subnational borrowing, with a few economically dominant states accounting for a disproportionate share of Nigeria’s debt, reinforcing the need for prudent fiscal management and sustainable financing strategies across the federation.