In 2025, Nigerian states faced mounting pressure as they paid ₦455.38 billion to service foreign debt, up from ₦362.08 billion in 2024.
According to NBS analysis of FAAC data, states increasingly channelled statutory allocations directly to meet external obligations.
Rising Foreign Debt Burden
Under the FAAC system, foreign debt acts as a first-line charge, so the government deducts repayments before states receive their allocations.
Consequently, states have less funding for salaries, capital projects, and essential services, creating persistent fiscal strain.
Monthly Repayments And Trends
At the start of the year, states paid ₦40.09 billion in January, which fell slightly to ₦39.10 billion in February.
From March to July, repayments remained steady at ₦39.10 billion, reflecting fixed obligations.
Then in August, states reduced deductions to ₦36.14 billion, and this level persisted through December, providing some predictability for the second half of the year.
By contrast, 2024 experienced sharper fluctuations.
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Deductions climbed from ₦9.88 billion in January to ₦40.41 billion in March.
They then fell to ₦21.70 billion in April and stayed unchanged until July.
Afterwards in August, states increased deductions again to ₦40.09 billion, which remained stable through December.
Regional And State Burden
The repayment burden is uneven.
The top 10 states contributed 68.57% of total foreign debt service.
Lagos paid the most at ₦92.80 billion, representing 20.38% of the national total.
Rivers more than doubled its repayment to ₦48.58 billion, while Ogun’s obligations rose to ₦25.20 billion, effectively more than doubling.
Other top contributors include Kaduna, Cross River, Oyo, Edo, Bauchi, Kano, and Ebonyi.
Regionally, the South-West carried the heaviest load at ₦162.77 billion, followed by the South-South (₦100.37 billion) and the North-West (₦81.97 billion).
Meanwhile, the North-East, South-East, and North-Central contributed smaller amounts.
These figures highlight a stark reality: foreign debt repayments dominate allocations, and states must navigate continuous fiscal pressure while funding essential services.
