Top Nigerian States With the Highest, Least Debt to China, IMF

In 2024, the rate of the Nigeria’s external debt made some states actively reducing their exposure to foreign lenders, while others continue to pile on the debt. 

According to the latest figures from the Debt Management Office (DMO), Lagos remains the nation’s biggest debtor, while Jigawa holds the title for the least indebted state.

Lagos still leads in external debt

Despite making some progress in reducing its debt burden, Lagos State continues to top the chart. The state’s external debt stood at $1.17 billion at the end of 2024, a slight drop from $1.24 billion in the previous year.

That figure represents nearly a quarter about 24% of the total external debt owed by Nigeria’s 36 states and the Federal Capital Territory (FCT).

Following Lagos is Kaduna State, which saw its debt grow from $590 million to $630 million, a 6.48% increase. Edo State also recorded a significant jump, with external debt rising by over 21% to hit $380 million.

Jigawa, Yobe, and others cutting down

On the opposite end of the spectrum, Jigawa has taken the spotlight as the least indebted state in the country. Its external debt dropped from $25.8 million in 2023 to $23.3 million in 2024. Yobe State also followed a similar path, reducing its debt to $19.7 million.

Other states that made efforts to slash their foreign debts include Enugu, which brought its obligations down by over $33 million, and Akwa Ibom, which saw a $7 million reduction. These figures indicate deliberate steps by some state governments to better manage their debt exposure amid economic uncertainties.

Rising debt in some states

Not all states have followed the path of reduction. Rivers State, for instance, saw a dramatic increase in its external debt from $80.9 million in 2023 to a whopping $199.5 million in 2024. That’s a spike of more than 146%, one of the highest jumps recorded among the states.

Nigeria’s Overall Debt Landscape

While the states’ total external debt saw a minor decrease falling from $4.61 billion to $4.80 billion, the cost of servicing these debts remains a heavy burden. Nigeria spent around $4.66 billion servicing external loans in 2024, a sharp increase from the previous year. Much of this went to commercial creditors, whose loans often come with higher interest rates.

Meanwhile, multilateral debt servicing nearly doubled, jumping from $1.23 billion to $2.62 billion. On the other hand, bilateral debt those owed to countries like China rose modestly, indicating some level of stability in that category.

The spike in debt service costs is largely attributed to rising global interest rates and the naira’s depreciation, which makes dollar-denominated loans more expensive to repay.

What to note

With Nigeria’s total public debt now over N144 trillion and the federal government allocating trillions just to keep up with payments, the pressure to manage both domestic and external borrowing is increasing. 

Analysts have raised concerns about the country’s growing dependence on debt and the sustainability of current borrowing patterns.

As states like Lagos continue to carry a significant portion of the country’s debt load, and others like Rivers rapidly increase theirs, there’s an urgent need for smarter fiscal policies and debt management strategies especially in an economic climate that remains unpredictable.