The Federal Government has announced that 33 states and the Federal Capital Territory (FCT) have significantly reduced their domestic debt profiles, repaying a combined total of N1.85 trillion between June 2023 and December 2024.
This was revealed in the May 16, 2025 edition of The Explainer, a weekly publication of the National Orientation Agency (NOA), which detailed the nation’s debt reduction progress.
According to the report, the 36 states and the FCT had a domestic debt stock of N1.66 trillion in December 2014, rising to N5 trillion by June 2023. However, aggressive fiscal reforms under the Tinubu administration, particularly the removal of fuel subsidy and naira floatation, helped unlock increased revenue flows to the states.
The publication noted that state and local governments shared N6.16 trillion in FAAC allocations in 2023—a 28.6% increase from the N4.79 trillion received in 2022. In 2024, allocations soared further to N9.58 trillion, enabling record debt repayments.
Top-performing states in debt reduction include:
- Delta State: N265.83 billion
- Lagos State: N96.23 billion
- Imo State: N94.70 billion
- Cross River: N85.91 billion
- Ogun State: N81.35 billion
However, Niger, Enugu, and Rivers States were the only ones that increased their debt burden during the period. Rivers topped this list, adding N138.89 billion in new domestic debt.
The Federal Government also made strides in reducing external debt, paying off its entire $3.264 billion obligation to the International Monetary Fund (IMF) within 18 months. By Q2 2025, the outstanding balance of $800.23 million—as of December 2024—was cleared, marking the full repayment.
Other federal debt repayments include:
- N22 trillion in securitized Ways and Means arrears
- N100 billion in 2018 Sukuk bond
- N5.87 trillion in domestic debt in 2024
In total, domestic debt servicing reached N8.81 trillion over the 18-month period. As a result, Nigeria’s total public debt stock dropped from $113.42 billion in June 2023 to $94.22 billion by December 2024.
The NOA praised the Tinubu administration’s fiscal discipline and transparency in public finance management, describing the developments as a “landmark turnaround” in Nigeria’s debt sustainability trajectory.
