Twelve state governors whose tenures will end in 2027 and early 2028 are set to leave behind a combined debt burden of about N5.3tn, comprising domestic and external obligations, findings by The PUNCH have shown.
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 obtained from the Debt Management Office showed that the 12 states had accumulated domestic debts of N2.16tn as of the first quarter of 2026, while 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, while Uzodimma and Diri will remain in office until January 15 and February 14, 2028, respectively.
The debt positions of the states have, however, followed different trajectories under the governors, with some reducing their domestic or external obligations despite the overall increase in the combined debt stock.
Lagos tops list
Lagos State carries by far the largest domestic debt burden among the 12 states.
The state’s domestic debt stood at N1.205tn as of the first quarter of 2026, according to the DMO, accounting for more than half of the N2.16tn combined domestic debt of the affected states.
At the other end of the scale is Nasarawa, whose domestic debt stood at N27.15bn, the lowest among the 12 states.
Lagos also recorded the highest external debt, with outstanding foreign obligations of $1.174bn in the DMO’s 2025 external debt profile.
Yobe had the lowest external debt at $46.67m.
The combined obligations could increase further before the governors leave office if the states undertake fresh borrowing or updated DMO data show additional liabilities.
Debt management record
An analysis of the debt positions inherited by the governors shows a mixed record, with some administrations increasing both domestic and external obligations while others succeeded in reducing at least one component of their debt.
In Adamawa, Fintiri is expected to leave office with domestic debt of N64.7bn, down from N95.22bn when he assumed office. However, the state’s external debt increased to $124m from $100.614m.
Yobe’s Buni increased domestic debt to N98.60bn from N27.47bn. Its external obligations also rose to $46.67m from $26.911m.
Sule is expected to leave Nasarawa with domestic debt of N27.15bn, which is a reduction from N89.95bn when he came to office. His state has external debt of $60.82m.
In Imo, Uzodimma reduced domestic debt substantially to N81.65bn from N164.436bn inherited when he took office. However, external debt increased to $117.08m from $64.762m.
Kwara also recorded a reduction in domestic debt under AbdulRazaq, falling to N56.92bn from N59.58bn. External obligations, however, rose to $64.159m from $47.961m.
Abiodun of Ogun increased both domestic and external debt. Domestic obligations rose to N200.748bn from N97.050bn, while external debt increased to $217m from $102.154m in the first quarter of 2019.
Gombe’s Yahaya reduced domestic debt to N65.17bn from N76.895bn but increased external obligations to $88.7m from $36.960m.
In Bauchi, domestic debt climbed to N154.45bn from N93.320bn under Bala Mohammed, while external debt rose to $220.6m from $133.705m.
Zulum increased Borno’s domestic debt to N88.44bn from N78.259bn and external debt to $69.9m from $21.313m.
Bayelsa recorded one of the sharper reductions. Diri cut domestic debt to N50.17bn from N147.930bn and external debt to $55.5m from $59.551m.
Makinde also reduced Oyo’s domestic debt to N69.8bn from N94.140bn and external obligations to $87.5m from $136.531m.
In Lagos, Sanwo-Olu increased domestic debt to N1.205tn from N542.231bn but reduced external obligations to $1.174bn from $1.421bn.
A 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 to repay the obligations.
He said the lack of policy continuity remained a major obstacle, as successive administrations often abandoned existing strategies and introduced new ones instead of building on previous investments.
“Under the current arrangement, every government that comes wants to invent its own wheel. States can actually reduce their debts if they can identify productive investments and channel resources into them,” he said.
Nwogwugwu cited Imo’s investment drive in the gas sector as an example of an attempt to develop alternative sources of economic growth.
“Hope Uzodimma is being inventive in Imo State by trying to channel investments into gas. Alex Otti is also being very inventive by focusing on people-oriented programmes,” he said.
He warned that governments that prioritise projects without clear economic returns risk accumulating large debt burdens.
“Governments that work on publicist projects borrow very heavily. It is not rocket science because every state has something that it can invest in and generate returns,” he said.
According to him, borrowing is not inherently harmful if the funds are deployed into investments that generate returns and improve citizens’ welfare.
“Debt is a micro-unit of a nation. Every part of the state should feel both the cost and the benefits. States have to borrow. There is nothing wrong with states borrowing as far as the debts will be paid back,” he said.
Similarly, a Professor of International Economics, Jonathan Aremu, said borrowing could support economic development when funds were channelled into productive investments but could become a burden when used for projects that generated little or no economic returns.
“I always say that there is nothing wrong with debt. If the debt is productive, there is nothing wrong with it. If you borrow N10m and it generates N20m, the debt is a good one,” Aremu said.
He said infrastructure that improves economic activity could constitute productive borrowing.
“If I can borrow and build a road that will help agricultural produce get to the market, the debt is a good one. If it is not producing anything, it is dead-weight debt. It means it is putting a lot of burden on the economy,” he said.
Aremu urged governments to assess the long-term economic impact of every borrowing decision, particularly its ability to generate revenue and improve living standards.
“You have to decide whether it is productive or a dead weight. One thing about debt is that it should not tamper with the sustainability of the economy. The government must consider whether it is productive, dead weight or whether it will improve the lives of the people in the future,” he said.
An emerging markets analyst, Ike Ibeabuchi, meanwhile, warned states against excessive reliance on external borrowing, particularly because the naira’s depreciation has significantly increased the local-currency cost of servicing foreign obligations.
He noted that the naira had weakened substantially from about N465/$ in May 2023 to around N1,326/$, making dollar-denominated obligations considerably more expensive when measured in naira.
“With naira depreciating, external debts are quite a big burden. If you must borrow, look for domestic sources or assets to sell,” he said.
