Only 7 of the 36 Nigerian states and the FCT reduced their external debt between June 2023 and December 2025. Lagos alone cut about $247.2 million, roughly 2.7 times the combined reduction of the other six states shown.
States can only meaningfully reduce foreign debt when cash flows improve enough to absorb repayments without choking local spending. Across Nigeria, FAAC disbursements expanded sharply during this period. In February 2024, total FAAC disbursement was ₦2.07 trillion, including ₦379.41 billion for states. By the October 2025 sharing round, total distributable revenue had risen to ₦2.094 trillion, with ₦689.12 billion going to states. That kind of revenue lift creates room for selective debt paydown, especially for states with stronger internal revenue bases.
Lagos stands out because it has more room than anyone else to act. The state reported ₦1.3 trillion in internally generated revenue in 2024, up 45% from 2023. That scale matters. It means Lagos could cut external obligations more aggressively while still funding a large operating and capital program. By contrast, the states with the fastest reduction rates are not necessarily those with the largest cash reductions. Oyo's 35.9% drop is the sharpest percentage move in the chart, but in dollar terms it is still far behind Lagos. That is the difference between cutting from a large base and cutting from a smaller one.
