Nigeria, the fourth-largest African economy, has seen its total public debt rise to ₦149.39 trillion (approximately $97 billion) as of March 31, 2025.
- Nigeria’s public debt rose to ₦149.39 trillion ($97 billion) by March 2025, marking a 22.8% increase from the previous year.
- External debt accounted for ₦70.63 trillion, growing significantly due to currency depreciation and borrowing from global lenders.
- Nigeria faces increased debt servicing costs attributed to currency volatility and rising external debt obligations.
This represents a record increase of ₦27.72 trillion, or 22.8%, compared to ₦121.67 trillion recorded in the same period last year.
According to the latest Debt Management Office (DMO) figures, the country’s debt rose by ₦4.72 trillion, or 3.3%, from ₦144.67 trillion at the end of December 2024.
Nigeria’s public debt has been driven by domestic and external borrowing to fund budget gaps, compounded by the impact of a weakening naira on external debt valuation.
Impact of ₦70.63 trillion debt on currency
Recent financial data shows that Nigeria’s external debt now stands at ₦70.63 trillion as of Q1 2025, up from ₦56.02 trillion in the same period in 2024, reflecting a ₦14.61 trillion or 26.1% yearly increase.
On a quarter-on-quarter basis, the increase was more modest, with the figure rising marginally by ₦344 billion from ₦70.29 trillion at the closing of the previous year.
Notably, the disparity between dollar and naira growth in the debt figures highlights the deepening impact of foreign exchange volatility. While the dollar-denominated debt rose by only $3.86 billion, the naira equivalent surged due to the depreciation and incessant servicing of the local currency.
Reports showed that in Q1 2024, the Central Bank of Nigeria used an exchange rate of ₦1,330.26/$1. Although the official rate for Q1 2025 was not disclosed, the steep rise in naira terms points to a further decline in currency value.
The country’s rising debt is partly due to external borrowings from multilateral lenders, bilateral partners, and commercial creditors, including World Bank and Eurobond holders, which has increased the cost of external loans in local currency terms.
This has also limited the country’s ability to fund development projects, as a significant portion of revenue goes toward repaying interest and principal on external loans.
Domestic debt nears ₦79 Trillion
More data showed that Nigerian domestic debt continued to climb, reaching ₦78.76 trillion ($51.26 billion) as of March 2025, representing a record ₦13.11 trillion or 20% increase from ₦65.65 trillion in March 2024. On a quarterly basis, domestic debt grew by ₦4.38 trillion or 5.9% from ₦74.38 trillion in December 2024.
The Nigeria’s federal Government accounts for the majority of the domestic debt at ₦74.89 trillion ($48.73 billion), while the 36 states and the Federal Capital Territory (FCT) collectively owed ₦3.87 trillion ($2.52 billion), highlighting a slight decrease from ₦4.07 trillion in Q1 2024 and a hint at better debt servicing or reduced borrowing at the subnational level.
As of Q1 2025, Nigeria’s debt portfolio is nearly evenly split, with domestic debt accounting for 52.7% and external debt 47.3%, representing a subtle shift from 2024 when domestic debt made up 54%.
The increase in the share of external debt, particularly in naira terms, highlights growing risks associated with Nigeria’s foreign borrowing strategy, as a weakening currency inflates repayment costs.
Analysts warned that Nigeria’s rising debt profile, especially the external portion amplified by currency risks, could jeopardize debt sustainability and strain future budgets through mounting debt servicing costs.
With the country’s debt load approaching ₦150 trillion ($97.79 billion), coupled with weak revenue growth and currency instability, experts are increasingly concerned about the reckless approaches to debt sustainability and the country’s ability to balance growth with fiscal responsibility, especially under scrutiny from global credit rating agencies.
Olamilekan Okebiorun
