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Top 10 States With the Biggest Foreign Debt Deductions From FAAC in 2025

In 2025, Nigeria’s 36 states collectively lost ₦455.38 billion to foreign debt service deductions taken straight from their FAAC allocations. That figure is not small change. It is ₦93.30 billion higher than the ₦362.08 billion deducted in 2024 a 25.77% jump in one year.

What this means in plain terms is simple: before many states could even “see” their monthly FAAC money, a portion was removed automatically to repay foreign loans owed to external creditors such as multilateral and bilateral lenders.

These deductions are treated like a first-line charge, they happen at source, leaving states with less cash to run government, pay contractors, and fund public services.

Why these deductions matter

FAAC is a major lifeline for most states. So when debt service takes a bigger bite, states feel it immediately in the places that touch people’s lives: salary pressure, delayed projects, fewer upgrades in health facilities, slower road works, weaker education funding, and limited support for social programmes.

The pain is sharper for states that already struggle to raise strong Internally Generated Revenue (IGR).

The top 10 dominated the deductions

Debt exposure is heavily concentrated. In 2025, the top 10 states alone accounted for about 69% (68.57%) of all foreign debt deductions nationwide.

In other words, just 10 states carried most of the foreign debt repayment pressure coming out of FAAC.

Below is the ranking, based on total foreign debt service deductions from FAAC in 2025.

Rank	State	2025 Foreign Debt Deductions
1	Lagos	₦92.80bn
2	Rivers	₦48.58bn
3	Kaduna	₦47.93bn
4	Ogun	₦25.20bn
5	Cross River	₦21.01bn
6	Oyo	₦20.17bn
7	Edo	₦18.70bn
8	Bauchi	₦16.85bn
9	Kano	₦10.63bn
10	Ebonyi	₦10.37bn

What stands out in the top 10

Lagos led by a wide margin at ₦92.80bn, roughly one-fifth of the entire national total. Lagos also recorded a strong year-on-year increase from ₦72.32bn in 2024, showing how quickly deductions can rise even for a state with strong economic activity.

Rivers was one of the biggest movers, jumping to ₦48.58bn from ₦23.13bn in 2024—more than doubling. That kind of leap is exactly why many fiscal watchers are worried: when deductions spike, spending plans can collapse mid-year.

Kaduna stayed among the top three with ₦47.93bn, a slight increase from 2024, but still a heavy load to carry monthly.

Ogun also surged sharply, climbing to ₦25.20bn from ₦11.99bn the year before—another reminder that foreign debt costs can accelerate fast.

2025 vs 2024: steadier monthly pattern, bigger annual burden

Monthly trends show an interesting difference between both years. In 2025, deductions started at ₦40.09bn in January, eased to ₦39.10bn in February, then stayed around ₦39.10bn from March to July. In August, it dropped again to ₦36.14bn, and that level held through December. So yes, 2025 was more stable month-to-month.

But stability didn’t mean relief. The annual total still ended up much higher than 2024.

In 2024, deductions were more “up and down”: they began at ₦9.88bn in January, jumped to ₦24.53bn in February, peaked at ₦40.41bn in March, then eased to ₦21.70bn from April to July before rising again to ₦40.09bn from August to December.

Regional view: where the pressure was highest

By geopolitical zone, the South-West recorded the highest foreign debt service at ₦162.77bn (about 35.74% of the national total), driven largely by Lagos, Ogun, and Oyo.

The South-South followed with ₦100.37bn (about 22.04%), powered by Rivers, Edo, and Cross River. The North-West came next at ₦81.97bn, strongly influenced by Kaduna and Kano.

The North-East posted ₦42.42bn, the South-East recorded ₦40.20bn, while the North Central had the lowest total at ₦27.65bn.

When debt service grows faster than revenue, budgets become tighter, and government choices turn ugly—cut spending, borrow again, or delay obligations. Fiscal watchdogs have warned that some states with high deductions do not always rank among the strongest FAAC earners, which raises red flags about debt-to-revenue stress.

Economists have also warned that if states don’t improve IGR and manage borrowing more carefully, debt service will continue to crowd out essential services. The debate is no longer “should states borrow?” It is now “are states borrowing smart, and can they comfortably repay without starving hospitals, schools, and infrastructure?”

What states can do next

The practical path forward is not magic. It’s discipline.

States need better project selection (borrow for projects that clearly grow revenue or productivity), stronger IGR reforms, more transparent debt reporting, and smarter financing structures that reduce repayment shocks. Many analysts also argue for more professional balance-sheet management—so debt is not just taken, but structured, timed, and matched to realistic revenue plans.

What you should know

₦455.38bn deducted in one year is a loud warning. Foreign debt itself is not automatically “bad,” but when repayments start swallowing FAAC at this scale, it becomes a governance and service-delivery problem. In 2025, the top 10 states carried most of the burden—and if that trend continues, state governments will face even tougher trade-offs heading into the next budget cycles.