Lagos Emerges Nigeria’s Most Indebted State With ₦1.22trn, $1.17bn Debt Report

Lagos Emerges Nigeria’s Most Indebted State With ₦1.22trn, $1.17bn Debt Report Lagos State has emerged as the most indebted state in Nigeria, owing a combined domestic and external debt estimated at ₦1.22 trillion and $1.17 billion respectively as of the fourth quarter (Q4) of 2025, according to a new debt profile report. The report, published by The Guardian Nigeria, showed that Lagos maintains the largest debt exposure among Nigeria’s 36 states, reflecting the financial demands associated with sustaining large-scale infrastructure development, public services, and urban expansion projects. According to the figures, Lagos’ domestic debt stock stood at approximately ₦1.22 trillion, while its external obligations reached $1.17 billion by the end of 2025. The debt level places the commercial hub significantly ahead of other subnational governments in terms of total borrowing. Analysts noted that the state’s heavy borrowing is largely linked to its aggressive investment in transportation systems, housing initiatives, road construction, healthcare expansion, and economic growth programmes aimed at supporting its rapidly growing population and business ecosystem. Despite the rising debt profile, financial experts argue that Lagos possesses a stronger internally generated revenue base compared to most Nigerian states, enabling it to manage higher debt levels relative to peers. The state remains Nigeria’s economic powerhouse, contributing a significant share to national GDP and attracting the bulk of private-sector investments. However, economists have warned that increasing debt servicing costs could pose fiscal challenges if revenue growth slows or macroeconomic pressures intensify. Concerns have also been raised about the sustainability of subnational borrowing across Nigeria, particularly amid exchange rate volatility affecting external loans. Recent data indicate that total debt owed by Nigerian states has continued to climb, prompting calls for stricter fiscal discipline, improved revenue mobilisation, and transparent utilisation of borrowed funds Lagos has consistently ranked among the highest-borrowing states due to its status as Nigeria’s financial and commercial centre. Government officials have repeatedly defended the borrowing strategy, describing it as necessary to finance capital-intensive infrastructure projects designed to support long-term economic growth.

While Lagos’ debt profile underscores its ambitious development agenda, experts emphasise the importance of maintaining prudent debt management practices to ensure fiscal sustainability and protect future public finances.