Nigeria’s debt hits N159.28tn, doubles in two years as borrowing pressures mount

Nigeria’s total public debt has climbed to N159.28 trillion as of December 31, 2025, intensifying concerns over the country’s rising debt burden and its implications for economic stability.

Figures released by the Debt Management Office (DMO) show that the latest debt stock represents an increase of N5.98 trillion, or 3.9 per cent, compared to N153.29 trillion recorded at the end of September 2025.

On a year-on-year basis, the country’s debt rose by N14.61 trillion, or 10.1 per cent, from N144.67 trillion as of December 2024, highlighting a sustained reliance on borrowing to finance government expenditure.

A broader review of the data indicates that Nigeria’s debt profile has nearly doubled within a little over two years, rising from N87.4 trillion in June 2023 to the current level. The figure also marks a sharp increase from N12.1 trillion recorded in 2015, underscoring a steady expansion in public debt over the past decade.

The DMO data attributes the latest increase to a combination of domestic and external borrowings recorded in the final quarter of 2025.

External debt rose from N71.48 trillion in September 2025 to N74.43 trillion in December 2025, reflecting an increase of N2.95 trillion, or 4.1 per cent. Domestic debt also grew from N81.82 trillion to N84.85 trillion within the same period, accounting for a rise of N3.03 trillion, or 3.7 per cent.

Despite the upward trend, domestic debt continues to account for the larger share of Nigeria’s total obligations, making up 53.27 per cent, while external debt represents 46.73 per cent. This distribution has remained relatively stable compared to previous quarters.

Further disaggregation shows that the Federal Government remains the dominant borrower, particularly in the domestic market. Its domestic debt increased from N77.81 trillion in September 2025 to N80.49 trillion by December 2025.

Similarly, debt owed by states and the Federal Capital Territory rose from N4.00 trillion to N4.36 trillion over the same period.

In dollar terms, Nigeria’s public debt rose from $103.94 billion in September 2025 to $110.97 billion in December 2025, reflecting a quarterly increase of $7.04 billion. External debt grew from $48.46 billion to $51.86 billion, while domestic debt rose from $55.47 billion to $59.12 billion.

However, exchange rate movements helped moderate the naira value of external debt, with the DMO applying N1,474.85 to the dollar for September 2025 and N1,435.26 for December 2025.

Year-on-year analysis shows that domestic borrowing was the principal driver of the increase in Nigeria’s debt stock. Domestic debt rose significantly from N74.38 trillion in December 2024 to N84.85 trillion in December 2025, marking an increase of N10.47 trillion, or 14.1 per cent.

In contrast, external debt recorded a comparatively modest increase from N70.29 trillion to N74.43 trillion within the same period, representing a rise of N4.14 trillion, or 5.9 per cent.

The Federal Government accounted for the bulk of the debt, with N80.49 trillion in domestic obligations and N66.27 trillion in external debt. States and the FCT recorded N8.16 trillion in external debt and N4.36 trillion in domestic debt.

The composition of the debt stock has also shifted slightly over the past year. External debt declined from 48.59 per cent of total debt in December 2024 to 46.73 per cent in December 2025, while domestic debt rose from 51.41 per cent to 53.27 per cent, reflecting a growing preference for local borrowing.

Speaking at the IMF Spring Meetings in Washington, DC, Director-General of the DMO, Patience Oniha, said Nigeria’s borrowing framework is anchored on legal safeguards designed to ensure transparency and accountability.

She explained that all loan requests must be approved by the National Assembly in line with existing laws, including the Fiscal Responsibility Act, allowing lawmakers to scrutinise borrowing plans and assess their sustainability.

According to her, the approval process – often conducted publicly – enhances investor confidence by demonstrating adherence to due process.

Oniha, however, acknowledged challenges within the system, particularly the need to strengthen the technical capacity of lawmakers to effectively evaluate increasingly complex debt instruments.

She called for greater collaboration with institutions such as the World Bank and the International Monetary Fund to support capacity building and improve oversight mechanisms.

The DMO boss also stressed the importance of aligning borrowing with revenue generation, warning that excessive dependence on debt could erode fiscal space and hinder long-term economic growth.

Meanwhile, concerns over the rising debt profile continue to grow among stakeholders.

Former Anambra State governor and Labour Party presidential candidate, Peter Obi, criticised the trend, arguing that the country’s mounting debt has not translated into tangible development outcomes.

He noted that despite policy reforms such as the removal of fuel subsidies, borrowing has continued to rise, raising questions about fiscal discipline and resource utilisation.

Obi warned that the current trajectory could worsen Nigeria’s economic outlook if urgent steps are not taken to curb borrowing and boost productivity.

Economic analysts say the latest figures reinforce the need for structural reforms, improved revenue mobilisation, and prudent fiscal management to prevent further escalation of the country’s debt burden.