Nigeria’s Public Debt Rises to ₦152.4 Trillion Amid Growing Fiscal Strain

Nigeria’s public debt stock has climbed to ₦152.40 trillion as of June 30, 2025, marking another milestone in the country’s mounting fiscal pressures.

The latest data from the Debt Management Office (DMO) show that the figure represents an increase of ₦3.01 trillion, or 2.01 percent, from the ₦149.39 trillion recorded at the end of March.

In dollar terms, Nigeria’s total debt rose from $97.24 billion to $99.66 billion within the same period, a 2.49 percent increase. The rise, though moderate, reflects the twin impact of currency depreciation and continued reliance on borrowing to fund public spending.

According to the DMO, the increase was partly driven by exchange rate movements, as the naira weakened to ₦1,529.21 per dollar by the end of June. This conversion effect magnified the naira value of external borrowings even though new loans were minimal.

External Debt Edges Higher

Nigeria’s external debt stock stood at $46.98 billion (₦71.85 trillion) as of June 2025, up from $45.98 billion (₦70.63 trillion) in March. Multilateral institutions remain the country’s biggest lenders, accounting for $23.19 billion or 49.4 percent of total foreign obligations. The World Bank’s International Development Association (IDA) is the single largest creditor, with $18.04 billion outstanding.

Bilateral loans totalled $6.20 billion, led by China’s Export-Import Bank with $4.91 billion, followed by loans from France, Japan, India, and Germany. Commercial borrowings, largely made up of Eurobonds, amounted to $17.32 billion, representing 36.9 percent of the external debt. Another $268.9 million was owed to commercial banks and under syndicated facilities.

Analysts say the structure of Nigeria’s external debt – heavily concentrated in Eurobonds and multilateral loans – exposes the country to exchange rate risks and international market shocks.

Domestic Debt Crosses ₦80 Trillion

The domestic component of the debt reached ₦80.55 trillion by the end of June, compared to ₦78.76 trillion three months earlier. Federal Government bonds dominated the portfolio with ₦60.65 trillion, representing about 79 percent of the total domestic debt.

These bonds include ₦36.52 trillion in standard FGN bonds, ₦22.72 trillion in securitised Ways and Means advances, and ₦1.40 trillion in dollar-denominated bonds. Treasury bills accounted for ₦12.76 trillion, while Sukuk bonds, savings bonds, and green bonds made up smaller portions of the portfolio. Promissory notes totalling ₦1.73 trillion also form part of domestic obligations.

The growing dependence on securitised Central Bank loans underscores the government’s struggle to balance revenues and expenditure. Economists warn that this approach, while providing short-term relief, could crowd out private sector borrowing and deepen long-term fiscal risks.

Federal Government Holds Lion’s Share

Of the ₦152.4 trillion total debt, the Federal Government is responsible for ₦141.08 trillion, or 92.6 percent of the entire stock. This includes ₦64.49 trillion in external loans and ₦76.59 trillion in domestic debt.

For the first time in 2025, the DMO provided a separate breakdown for state governments and the Federal Capital Territory. Their combined external debt stood at $4.81 billion (₦7.36 trillion), while domestic obligations amounted to ₦3.96 trillion. This brings subnational debts to ₦11.32 trillion, representing 7.4 percent of the national total.

Currency Weakness Inflating Debt Profile

The DMO noted that the rising exchange rate was a major factor in the debt expansion. The official rate used for conversion – ₦1,529.21 per dollar – was significantly weaker than the rate in March, meaning that Nigeria’s foreign loans are now worth more in naira terms.

Experts warn that continued naira depreciation could inflate the country’s debt profile even without new borrowing, putting more pressure on debt sustainability indicators.

Debt Sustainability in Question

Although Nigeria’s debt-to-GDP ratio is still below international danger thresholds, economists are increasingly concerned about the pace of growth and the burden of debt servicing.

In recent years, debt service has consumed as much as 80 percent of federal revenues, leaving little room for investment in infrastructure, health, and education.

Calls for Fiscal Reforms

The DMO urged the government to intensify efforts at revenue mobilisation and fiscal consolidation. It stressed the need to broaden the tax base, improve compliance, and curb wasteful spending.

With public debt now at an all-time high, experts say Nigeria must prioritise policies that boost exports, attract foreign investment, and strengthen the non-oil sector to reduce borrowing dependence.