12 Governors Set to Exit With N5.3tn State Debt Burden

By Benson Daniel

Twelve state governors whose tenures will end in 2027 and early 2028 are set to leave behind a combined debt burden estimated at about N5.3tn, placing fresh attention on the financial obligations that will be inherited by their successors.

The affected governors are Umaru Fintiri of Adamawa, Mai Mala Buni of Yobe, Abdullahi Sule of Nasarawa, AbdulRahman AbdulRazaq of Kwara, Dapo Abiodun of Ogun, Inuwa Yahaya of Gombe, Bala Mohammed of Bauchi, Babajide Sanwo Olu of Lagos, Babagana Zulum of Borno, Seyi Makinde of Oyo, Hope Uzodimma of Imo and Douye Diri of Bayelsa.

Available debt data show that the 12 states had accumulated domestic obligations of about N2.16tn as of the first quarter of 2026, while their external liabilities stood at approximately $2.33bn based on the latest state level external debt figures.

Most of the governors are expected to complete their constitutionally permitted two terms in 2027. Uzodimma and Diri, however, are scheduled to remain in office until January 15 and February 14, 2028, respectively.

Lagos accounts for the largest share of the domestic debt among the 12 states. Its domestic obligations stood at N1.205tn in the first quarter of 2026, representing more than half of the combined domestic debt of the affected states.

Nasarawa, on the other hand, recorded the lowest domestic debt among the group at N27.15bn.

The external debt figures also show Lagos at the top, with outstanding foreign obligations of $1.174bn as of December 2025. Yobe had the lowest external liability among the 12 states at $46.67m.

The debt positions reveal different fiscal paths under the outgoing administrations. While some governors reduced domestic borrowing, others recorded increases in both domestic and foreign obligations.

In Adamawa, Fintiri is expected to leave office with domestic debt of N64.7bn, compared with N95.22bn when he assumed office. However, the state’s external debt rose to $124m from $100.614m.

Yobe’s domestic debt increased to N98.60bn from N27.47bn under Buni, while its external obligations rose to $46.67m from $26.911m.

Nasarawa recorded a sharp reduction in domestic debt under Sule, falling to N27.15bn from N89.95bn. The state currently has external obligations of about $60.82m.

In Imo, Uzodimma reduced domestic debt from N164.44bn inherited at the beginning of his administration to N81.65bn, although external debt increased from $64.76m to $117.08m.

Kwara also recorded a modest decline in domestic debt, from N59.58bn to N56.92bn under AbdulRazaq, while its external obligations increased from $47.96m to $64.16m.

Ogun’s debt profile moved in the opposite direction. Domestic obligations increased from N97.05bn to N200.75bn under Abiodun, while external debt rose from $102.15m to $217m.

Gombe reduced its domestic debt from N76.90bn to N65.17bn but saw its external obligations rise from $36.96m to $88.66m.

Bauchi’s domestic debt increased from N93.32bn to N154.45bn, while its external debt rose from $133.71m to $220.57m.

Borno’s domestic obligations climbed from N78.26bn to N88.44bn, while external debt increased from $21.31m to $69.94m.

Bayelsa recorded one of the strongest reductions in both categories. Its domestic debt fell from N147.93bn to N50.17bn, while external obligations declined from $59.55m to $55.46m.

Oyo also reduced its domestic debt from N94.14bn to N69.8bn and external debt from $136.53m to $87.52m.

In Lagos, Sanwo Olu’s administration increased domestic debt from N542.23bn to N1.205tn but reduced external obligations from $1.421bn to $1.174bn.

Economists have continued to stress that borrowing is not necessarily harmful when loans are channelled into projects capable of generating revenue, improving productivity and strengthening the economic base of the states.

The concern, however, is that debt accumulated without corresponding productive investment can place significant pressure on future administrations, particularly through debt servicing and other recurrent obligations.

With the 2027 transition approaching, the debt position of the affected states is likely to become a major part of the fiscal conversation, especially as incoming administrations will have to balance inherited obligations with demands for infrastructure, salaries, social services and economic development.

The figures also underline the importance of continuity in state economic policies. Rather than abandoning existing investments whenever administrations change, experts argue that governments should build on projects capable of generating sustainable revenue and reducing dependence on fresh borrowing.

For the outgoing governors, the remaining period of their tenure therefore presents an opportunity to strengthen their states’ revenue bases and ensure that borrowed funds are tied to investments capable of producing measurable economic returns.