Twelve state governors whose terms are due to end in 2027 and early 2028 are expected to leave office with their states carrying a combined debt burden of about N5.3tn.
The figure comprises domestic and foreign obligations accumulated by Adamawa, Yobe, Nasarawa, Kwara, Ogun, Gombe, Bauchi, Lagos, Borno, Oyo, Imo and Bayelsa states.
The affected governors are Umaru Fintiri of Adamawa, Mai Mala Buni of Yobe, Abdullahi Sule of Nasarawa, AbdulRahman AbdulRazaq of Kwara, Dapo Abiodun of Ogun, Inuwa Yahaya of Gombe, Bala Mohammed of Bauchi, Babajide Sanwo-Olu of Lagos, Babagana Zulum of Borno, Seyi Makinde of Oyo, Hope Uzodimma of Imo and Douye Diri of Bayelsa.
Data from the Debt Management Office showed that the 12 states had accumulated domestic liabilities of N2.16tn by the first quarter of 2026. Their combined external debt stood at about $2.33bn, based on the latest available state-level figures.
Most of the governors are expected to complete their second terms in 2027. Uzodimma is scheduled to leave office on January 15, 2028, while Diri’s tenure is expected to end on February 14, 2028.
The debt records, however, show considerable differences in the financial performance of the individual states. While some administrations reduced their domestic or foreign obligations, others recorded significant increases in both categories.
Lagos had by far the largest domestic debt among the 12 states, with N1.205tn owed as of the first quarter of 2026. The figure represents more than half of their combined domestic debt.
Nasarawa recorded the lowest domestic liability at N27.15bn.
On external borrowing, Lagos also topped the list, owing $1.174bn according to the DMO’s 2025 external debt profile. Yobe had the smallest foreign debt at $46.67m.
The combined debt burden could rise further before the governors leave office if additional borrowing is undertaken or new liabilities are captured in subsequent DMO updates.
Mixed debt records across the states
An assessment of the debt positions inherited by the governors shows a mixed record.
In Adamawa, Fintiri reduced domestic debt from N95.22bn when he assumed office to N64.7bn by the first quarter of 2026. The state’s external debt, however, increased from $100.614m to $124m.
Yobe moved in the opposite direction under Buni. Domestic debt rose sharply from N27.47bn to N98.60bn, while external obligations increased from $26.911m to $46.67m.
Sule’s administration reduced Nasarawa’s domestic debt from N89.95bn to N27.15bn. The state currently has external obligations of $60.82m.
In Imo, Uzodimma cut domestic debt from N164.436bn to N81.65bn. External debt nevertheless rose from $64.762m to $117.08m.
Kwara also recorded a modest decline in domestic debt, from N59.58bn to N56.92bn under AbdulRazaq. Its external debt, however, increased from $47.961m to $64.159m.
Ogun recorded increases in both categories under Abiodun. Domestic debt more than doubled from N97.050bn to N200.748bn, while external obligations rose from $102.154m to $217m.
Gombe’s domestic debt declined from N76.895bn to N65.17bn under Yahaya, although its external debt climbed from $36.960m to $88.7m.
Bauchi’s domestic debt increased from N93.320bn to N154.45bn during Bala Mohammed’s tenure, while foreign obligations rose from $133.705m to $220.6m.
In Borno, Zulum’s administration increased domestic debt from N78.259bn to N88.44bn. External debt also rose substantially, from $21.313m to $69.9m.
Bayelsa was among the states that recorded significant reductions. Diri cut domestic debt from N147.930bn to N50.17bn and reduced external debt from $59.551m to $55.5m.
Oyo also lowered both categories under Makinde. Domestic debt fell from N94.140bn to N69.8bn, while external obligations declined from $136.531m to $87.5m.
In Lagos, Sanwo-Olu’s administration increased domestic debt from N542.231bn to N1.205tn. However, external debt fell from $1.421bn to $1.174bn.
Naira depreciation raises external debt concerns
According to market analysts, states with substantial foreign-currency liabilities face additional pressure because of the depreciation of the naira.
Noting that the naira had weakened from about N465 to the dollar in May 2023 to around N1,326, significantly increasing the naira value of dollar-denominated debt.
As the rising cost of servicing external obligations makes heavy reliance on foreign borrowing particularly risky for state governments. Meaning with the naira depreciating, external debts are quite a big burden. If borrowing must be done, domestic sources or assets to sell are the options to look to.
The debt position of the 12 states therefore presents a mixed picture ahead of the governors’ exit from office. While some administrations have reduced their liabilities, others have substantially expanded their debt stock, leaving incoming governments to manage obligations that could continue to shape their fiscal space in the years ahead.
