Nigeria’s 36 states collectively spent approximately ₦235.58 billion on servicing their foreign debt in the first half of 2025, marking a significant 68.4% increase compared to the same period in 2024. This sharp rise, primarily attributed to the depreciation of the naira, is placing a growing fiscal burden on state governments.
According to data compiled by the National Bureau of Statistics from the Federal Account Allocation Committee (FAAC), the Federal Government automatically deducts these debt payments from states’ monthly allocations before they are disbursed.
The first six months of the year saw a notable increase in monthly repayments. January 2025 recorded the highest monthly payment at ₦40.09 billion, a more than fourfold increase from ₦9.88 billion in January 2024. Payments between April and June were consistently ₦39.10 billion each month, an 80.1% rise from the previous year.
Lagos State remains the largest contributor to the debt servicing bill, paying ₦49.58 billion in the first half of 2025. This is a 52.8% increase from 2024 and more than double the amount paid by any other state.
Rivers State recorded a staggering surge, with its external debt payments leaping by more than 470% to ₦26.34 billion from ₦4.62 billion in the first half of last year. Kaduna State followed, ranking third with ₦24.47 billion in payments.
Rounding out the top five were Ogun and Edo states, with payments of ₦12.57 billion and ₦10.18 billion respectively. Together, these five states accounted for 52.3% of all external debt servicing payments made by the 36 states during the period.
