Nigeria’s 36 states paid a combined N455.38bn to service foreign loans in 2025, marking a 25.77 per cent increase from the N362.08bn recorded in 2024, according to Federation Accounts Allocation Committee (FAAC) data released by the National Bureau of Statistics and analysed by The PUNCH.

The N93.30bn year-on-year rise underscores growing fiscal pressure on subnational governments, as a larger share of their monthly FAAC inflows is now automatically deducted at source to meet external debt obligations.

Tighter Fiscal Space

Foreign debt service in the FAAC framework operates as a first-line charge, meaning deductions are made before states access their allocations. While this structure safeguards creditors and ensures repayment discipline, it also narrows states’ discretionary spending space—particularly in periods of revenue volatility.

The 2025 monthly pattern reflected a “step-down” structure rather than sharp fluctuations. Deductions stood at N40.09bn in January before easing to N39.10bn in February. The N39.10bn level persisted from March through July, suggesting predictable repayment schedules.

A second adjustment occurred in August, when total deductions declined to N36.14bn—a 7.56 per cent drop from July—and remained at that level through December.

This contrasts with 2024, when debt service figures swung sharply in the first quarter—rising from N9.88bn in January to N40.41bn in March—before stabilising in the latter part of the year.

Top 10 States Account for 69%

Debt servicing obligations remain highly concentrated. The top 10 states accounted for 68.57 per cent of total foreign debt deductions in 2025.

Lagos led with N92.80bn, representing 20.38 per cent of the national total and a 28.33 per cent increase from 2024.

Rivers followed at N48.58bn, more than doubling its 2024 figure with a 110.02 per cent jump.

Kaduna ranked third at N47.93bn, up 5.13 per cent year-on-year.

Ogun posted one of the sharpest increases, rising 110.22 per cent to N25.20bn.

Cross River recorded N21.01bn, up 22.86 per cent.

Other major contributors included Oyo (N20.17bn), Edo (N18.70bn), Bauchi (N16.85bn), Kano (N10.63bn), and Ebonyi (N10.37bn), with Ebonyi posting a 53.09 per cent rise.

Regional Breakdown

By geopolitical zone, the South-West carried the heaviest burden at N162.77bn, accounting for 35.74 per cent of total foreign debt service, largely driven by Lagos and Ogun.

The South-South followed with N100.37bn (22.04 per cent), buoyed by Rivers, Edo, Cross River, and Delta.

The North-West recorded N81.97bn (18.00 per cent), with Kaduna and Kano as key contributors.

The North-East accounted for N42.42bn (9.32 per cent), while the South-East posted N40.20bn (8.83 per cent). The North-Central had the lowest at N27.65bn (6.07 per cent).

Sustainability Concerns Mount

The Nigeria Extractive Industries Transparency Initiative (NEITI) warned that several states with heavy debt burdens rank lower in FAAC allocations, raising red flags over fiscal sustainability.

Economists caution that without stronger internally generated revenue (IGR), rising debt service obligations could crowd out spending on salaries, infrastructure, and social services.

Teslim Shitta-Bey, Director and Chief Economist at Proshare Nigeria LLC, argued that borrowing should not be the default option. He advocated for longer-term debt instruments structured more like equity and called for the creation of a comprehensive national asset register to unlock value from dormant assets.

He also criticised the underutilisation of revenue bonds, urging states to prioritise them over general obligation bonds.

Similarly, macroeconomic analyst Dayo Adenubi emphasised the need to expand consumption to boost Value Added Tax receipts, strengthen property and transport-related tax enforcement, and reinforce the social contract to enhance compliance.

With debt service now absorbing a significant portion of subnational revenues, analysts say fiscal reforms and revenue diversification are becoming increasingly urgent for Nigeria’s states.

Source: Punch

Dangote Petroleum Refinery has reduced the ex-depot price of Premium Motor Spirit (PMS) by N25 per litre, bringing the gantry price down from N799 to N774 per litre.

The refinery communicated the price adjustment to marketers on Tuesday, stating that the new rate takes immediate effect.

In a notice issued by its Group Commercial Operations Department, Dangote Petroleum Refinery and Petrochemicals FZE said: “This is to notify you of a change in our PMS gantry price from N799 per litre to N774 per litre.”

Industry pricing platform petroleumprice.ng confirmed on Tuesday that the revised price had been reflected.

The refinery also announced the end of its PMS lifting incentive. According to the notice, the bonus scheme closed at 12:00 a.m. on February 10, 2026, while credits for volumes lifted between February 2 and February 10, within previously communicated thresholds, will be posted to marketers’ account statements.

The price reduction comes amid continued adjustments in Nigeria’s deregulated downstream petroleum sector. PMS prices remained volatile throughout 2025 following the removal of petrol subsidies, with ex-depot prices fluctuating between about N700 and over N800 per litre, largely influenced by exchange rate movements, global crude oil prices and import dependence.

Large-scale domestic supply from the Dangote refinery, which commenced toward the end of 2025, helped moderate prices in some regions by reducing reliance on imported fuel. In early 2026, the refinery had raised its PMS gantry price to N799 per litre after selling at N699 during the festive period.

The latest reduction to N774 per litre suggests easing cost pressures and improving operational efficiency, as well as increased competition from imported cargoes and expected output from modular refineries.

With a processing capacity of 650,000 barrels per day, Dangote Petroleum Refinery is Africa’s largest single-train refinery and a key component of Nigeria’s strategy to cut fuel imports and conserve foreign exchange. Since beginning domestic PMS supply, the refinery has played an increasingly influential role in shaping ex-depot pricing in the downstream market.

President Bola Tinubu on Friday presented a ₦58.18 trillion 2026 Appropriation Bill to a joint session of the National Assembly of Nigeria, declaring that Nigeria’s economy is showing measurable signs of stabilisation following years of structural pressure.

Tagged “Budget of Consolidation, Renewed Resilience and Shared Prosperity,” the 2026 fiscal plan is aimed at locking in recent macroeconomic gains while translating economic recovery into improved living standards for citizens.

According to the President, Nigeria’s economy expanded by 3.98 per cent in Q3 2025, while inflation moderated significantly, falling to 14.45 per cent in November 2025 from 24.23 per cent in March 2025.

“With stabilising food and energy prices, tighter monetary conditions, and improving supply responses, we expect the disinflationary trend to persist into 2026, barring major supply shocks,” Tinubu said during the presentation on December 19, 2025.

The President highlighted additional positive indicators, including improved crude oil production, rising non-oil revenues, renewed investor confidence, and external reserves climbing to a seven-year high of approximately $47 billion.

Under the proposal, the Federal Government projects ₦34.33 trillion in revenue against planned expenditure of ₦58.18 trillion, resulting in a budget deficit of ₦23.85 trillion, equivalent to 4.28 per cent of GDP. Tinubu emphasised that the fiscal framework is built on realism, prudence, and growth-driven assumptions.

He further assured lawmakers of tighter discipline in budget implementation, stressing that fiscal spending in 2026 would be more outcome-focused.

“Every naira spent or borrowed must deliver measurable public value,” the President said.