Twelve Nigerian states are set to leave behind a combined debt burden of about N5.3tn as their governors approach the end of their tenures in 2027 and early 2028.
According to findings by The PUNCH, the affected states are Adamawa, Yobe, Nasarawa, Kwara, Ogun, Gombe, Bauchi, Lagos, Borno, Oyo, Imo and Bayelsa.
Data from the Debt Management Office showed that the 12 states had accumulated N2.16tn in domestic debt as of the first quarter of 2026. Their external obligations stood at about $2.33bn, based on the latest available state-level external debt data.
Most of the governors are expected to complete their second terms in 2027. Imo State Governor Hope Uzodimma and Bayelsa State Governor Douye Diri are expected to remain in office until January 15 and February 14, 2028, respectively.
Lagos leads domestic debt
Lagos State has the largest domestic debt among the 12 states, with N1.205tn owed as of the first quarter of 2026. The figure accounts for more than half of the combined domestic debt of the affected states.
Nasarawa recorded the lowest domestic debt at N27.15bn.
Lagos also had the highest external debt, standing at $1.174bn in the DMO’s 2025 external debt profile, while Yobe had the lowest at $46.67m.
The overall debt burden could rise further if the states take on additional borrowing before the governors leave office.
Mixed debt records
The debt records of the governors varied significantly.
Adamawa Governor Umaru Fintiri reduced domestic debt from N95.22bn when he assumed office to N64.7bn, although external debt increased from $100.614m to $124m.
In Yobe, Mai Mala Buni increased domestic debt from N27.47bn to N98.60bn, while external debt rose from $26.911m to $46.67m.
Nasarawa Governor Abdullahi Sule reduced domestic debt from N89.95bn to N27.15bn.
Imo’s Hope Uzodimma also reduced domestic debt substantially, from N164.436bn to N81.65bn, although external debt rose from $64.762m to $117.08m.
Bayelsa Governor Douye Diri reduced domestic debt from N147.93bn to N50.17bn, while external obligations fell from $59.551m to $55.5m.
Oyo Governor Seyi Makinde reduced domestic debt from N94.14bn to N69.8bn and external debt from $136.531m to $87.5m.
In Lagos, Governor Babajide Sanwo-Olu’s administration increased domestic debt from N542.231bn to N1.205tn, while external debt declined from $1.421bn to $1.174bn.
Ogun, Bauchi and Borno also recorded increases in both domestic and external obligations under their current governors.
Experts urge productive borrowing
Professor of Development Economics at Nnamdi Azikiwe University, Uche Nwogwugwu, said states could reduce their debt burden by investing borrowed funds in productive sectors capable of generating sufficient revenue.
He also identified a lack of policy continuity as a challenge, noting that successive administrations often abandon existing strategies rather than build on previous investments.
Professor of International Economics, Jonathan Aremu, similarly said borrowing could support development when funds were directed towards productive investments, particularly infrastructure that improves economic activity.
Emerging markets analyst Ike Ibeabuchi warned states against excessive reliance on foreign borrowing, noting that naira depreciation increases the cost of servicing dollar-denominated debt.
He pointed out that the naira had weakened from about N465/$ in May 2023 to around N1,326/$, making external obligations more expensive in naira terms.
The debt positions of the 12 states therefore present a mixed picture, with some administrations reducing domestic or external obligations while others increased both forms of borrowing.
