A policy-backed warning about a “silent fiscal emergency” that is subtly threatening the states of Nigeria’s economic stability has been released by the Nigeria Extractive Industries Transparency Initiative (NEITI).
This warning comes after the publication of NEITI’s most recent Policy Brief, “Beyond Federal Allocations: The Cost of Borrowings and Debt Servicing at State Level in Nigeria,” which offers new, fact-based information on how debt servicing commitments are limiting states’ ability to finance local infrastructure, poverty alleviation programs, and essential services.
Nigeria’s overall public debt rose to N149.38 trillion in the first quarter (Q1) of 2025, according to the Policy Brief, which also shows that between 10% and 30% of monthly FAAC allocations in many states are directly taken at source for debt servicing, leaving less room for grassroots development investment.The nation’s overall public debt rose by N4.72 trillion, or 3.3 percent, from the N144.67 trillion reported in the fourth quarter (Q4) of 2024, according to figures from the debt management agency.
The domestic debt owed by states and the Federal Capital Territory decreased to N3.86 trillion in March 2025 from N3.96 trillion in December 2024, while the federal government was responsible for the majority of the debt, which was N74.88 trillion in the quarter under review, up from N70.40 trillion in the previous quarter.
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