The federal and state governments have reduced their debt, supported by an increase in disbursements from the federation account allocation committee (FAAC), according to a report by the National Orientation Agency (NOA).
According to the report, seen by TheCable on Saturday, Nigeria’s 36 states and 774 local governments received a combined N9.58 trillion from FAAC in 2024.
The disbursement, the report said, was a 55.5 percent increase from the N6.16 trillion shared in 2023, and far above the N4.79 trillion received in 2022.
The NOA said the revenue spike came from a larger N15.26 trillion pool distributed among the three tiers of government in 2024, “driven by improved oil receipts and better tax collection”.
The agency said the windfall helped improve liquidity and solvency across the board, allowing most states to reduce their reliance on borrowing and embarking on “unprecedented debt repayments”.
According to NOA, between June 2023 and December 2024, the domestic debt stock of the 36 states and the FCT dropped from N5.82 trillion to N3.97 trillion — a reduction of N1.85 trillion in 18 months.
“Today, at least 33 states and the Federal Capital Territory (FCT) have reduced their domestic debt portfolios at an unprecedented rate,” the report reads.
“Thus, within a period of 18 months, spanning June 2023 to December 2024, these states have repaid a whopping total sum of N1.85 trillion to their creditors.”
The report said Delta state led the chart with a repayment of N265.83 billion, more than half its previous N465.4 billion debt.
“Lagos followed with N96.23 billion,” the report said.
“Imo (N94.70 billion), Cross River (N85.91 billion), and Ogun (N81.35 billion) state became part of the top five states with the highest debt repayment records.”
The NOA said Jigawa achieved a 96 percent reduction in its debt stock, slashing N41.8 billion from its N43.13 billion obligation.
In addition, the agency said Ondo repaid 82.6 percent of its debt, cutting it down to N61.6 billion from N74 billion.
However, the report showed that three states — Rivers, Niger, and Enugu — bucked the trend by increasing their debt stock.
“Instead of following the footsteps of their colleagues, these states borrowed more. Thus, between June 2023 and December 2024, Niger State increased its debt burden by N18.79 billion,” the NOA said.
“In the same vein, Enugu State borrowed additional N26.09 billion while Rivers State increased its debt by N138.89 billion within 18 months.”
The agency’s analysis also highlighted a significant drop in external debt at the federal level.
Nigeria’s total public debt (federal and state) fell from $113.42 billion in June 2023 to $94.22 billion in December 2024, the NOA said.
The orientation body said the federal government’s “significant milestone” was fully repaying Nigeria’s $3.264 billion debt to the International Monetary Fund (IMF) within two years of President Bola Tinubu’s administration.
“As at June 30, 2023, a month after the president assumed office, Nigeria’s indebtedness to IMF stood at $3.264 billion,” the report said.
“Six months after, specifically in December 2023, Nigeria’s IMF debt had shrunk to $2.469 billion. One more year later (December 2024), Nigeria has further reduced its indebtedness to IMF to only $800.23 million.
“This $800.23 million balance at the end of 2024 has now been totally cleared in the second quarter of 2025 as confirmed by IMF.
“So, in less than two years of Tinubu’s administration, Nigeria has paid off its $3.264 billion indebtedness to IMF.
“Thanks to increased revenue inflows, Nigeria’s revenue-to-debt service ratio has improved from 97 percent in early 2023 to 65 percent by the end of 2024.”
The NOA said in total, the federal government spent N8.81 trillion on domestic debt service in the first 18 months of the Tinubu administration, more than triple the N2.56 trillion spent in 2022 under the previous administration.
