Twelve state governors whose tenures will end in 2027 and early 2028 are on course to leave behind a combined debt burden of about N5.3 trillion, comprising domestic and external obligations, according to data from the Debt Management Office.
The affected states are Adamawa, Yobe, Nasarawa, Kwara, Ogun, Gombe, Bauchi, Lagos, Borno, Oyo, Imo and Bayelsa. As of the first quarter of 2026, the 12 states had accumulated N2.16 trillion in domestic debt, while their combined external obligations stood at approximately $2.33 billion, based on the latest available state-level figures.
Most of the governors are scheduled to complete their second terms in 2027. Imo State Governor Hope Uzodimma is expected to leave office on January 15, 2028, while Bayelsa State Governor Douye Diri is due to leave office on February 14, 2028.
The combined liabilities could increase before the governors leave office if the states take on additional loans or if updated debt figures are released.
Lagos State has the largest domestic debt among the 12 states, with obligations of N1.205 trillion as of the first quarter of 2026. The figure represents more than half of the group’s combined domestic debt.
Governor Babajide Sanwo-Olu inherited domestic obligations of N542.231 billion when he assumed office. Since then, the state’s domestic debt has increased by more than N660 billion.
Lagos also has the highest external debt among the affected states. Its foreign obligations stood at $1.174 billion in the DMO’s 2025 external debt profile, although this represents a reduction from the $1.421 billion external debt inherited by the administration.
Nasarawa Records Sharp Domestic Debt Reduction
Nasarawa has the lowest domestic debt among the 12 states, with outstanding obligations of N27.15 billion.
The figure represents a significant reduction from the N89.95 billion domestic debt inherited by Governor Abdullahi Sule. The state’s current external debt stands at $60.82 million, while Yobe has the lowest external debt among the 12 states at $46.67 million.
Adamawa has also reduced its domestic obligations under Governor Umaru Fintiri, with domestic debt falling from N95.22 billion to N64.7 billion. Its external debt, however, increased from $100.614 million to $124 million.
Yobe Debt Rises Under Mai Mala Buni
Yobe recorded increases in both domestic and external obligations under Governor Mai Mala Buni.
The state’s domestic debt rose from N27.47 billion to N98.60 billion, while external obligations increased from $26.911 million to $46.67 million.
In Imo, Governor Hope Uzodimma reduced domestic debt from N164.436 billion to N81.65 billion. However, the state’s external debt increased from $64.762 million to $117.08 million during the period.
Bayelsa recorded one of the strongest improvements across both categories. Governor Douye Diri reduced domestic debt from N147.930 billion to N50.17 billion, while external obligations also declined from $59.551 million to $55.5 million.
Oyo Also Cuts Domestic and External Debt
Oyo State recorded a similar reduction under Governor Seyi Makinde.
The state’s domestic debt fell from N94.140 billion to N69.8 billion, while external obligations dropped from $136.531 million to $87.5 million.
The figures demonstrate significant differences in debt management among the affected states. While some administrations reduced both domestic and external liabilities, others recorded reductions in one category while increasing borrowing in the other.
Debt Rises in Ogun, Bauchi and Borno
Ogun State recorded increases in both domestic and external debt under Governor Dapo Abiodun. Domestic obligations rose from N97.050 billion to N200.748 billion, while external debt increased from $102.154 million in the first quarter of 2019 to $217 million.
Bauchi also recorded growth in both categories under Governor Bala Mohammed. Domestic debt increased from N93.320 billion to N154.45 billion, while external obligations rose from $133.705 million to $220.6 million.
Borno recorded a more modest increase in domestic debt under Governor Babagana Zulum, rising from N78.259 billion to N88.44 billion. However, its external obligations increased substantially, from $21.313 million to $69.9 million.
Gombe recorded a mixed performance under Governor Inuwa Yahaya. Domestic debt declined from N76.895 billion to N65.17 billion, but external debt increased from $36.960 million to $88.7 million.
Kwara also reduced its domestic obligations slightly under Governor AbdulRahman AbdulRazaq, with debt falling from N59.58 billion to N56.92 billion. Its external debt, however, increased from $47.961 million to $64.159 million.
Economist Calls for Productive Use of Borrowed Funds
A Professor of Development Economics at Nnamdi Azikiwe University, Uche Nwogwugwu, said state governments could reduce their debt burden by investing borrowed funds in productive sectors capable of generating revenue.
Nwogwugwu said borrowing is not necessarily a problem when funds are deployed productively and the resulting investments generate sufficient revenue to service and repay the loans. He warned, however, against borrowing for projects that generate little or no economic returns.
The economist also identified poor policy continuity as a major challenge for state governments. He said successive administrations often abandon existing strategies and introduce new ones rather than building on investments and policies established by their predecessors.
Nwogwugwu cited Imo State’s investment drive in the gas sector as an example of efforts to develop alternative sources of economic growth.
Debt Management Remains a Challenge for Incoming Administrations
The debt figures suggest that the incoming administrations in the 12 states will inherit significantly different fiscal positions.
While some states have managed to reduce their domestic and external liabilities, others have accumulated additional obligations during the current administrations. The overall picture highlights the importance of how borrowed funds are deployed and whether investments can generate enough economic activity and revenue to support debt repayment.
With most of the affected governors set to leave office in 2027, and two remaining until early 2028, their final debt positions could still change before the transition to new administrations.
