₦159 trillion debt sparks renewed debate over Nigeria’s fiscal direction

Nigeria’s total public debt has climbed to an estimated ₦159.28 trillion, reflecting a sharp rise since President Bola Ahmed Tinubu assumed office in May 2023, according to figures compiled from economic tracking reports and Debt Management Office (DMO) data.

The increase comes despite the administration’s early decision to end the petrol subsidy regime, a flagship policy expected to reduce fiscal pressure and free up significant government revenue for development spending and economic stabilisation.

At the time of the administration’s inauguration in the second quarter of 2023, Nigeria’s total public debt stood at about ₦87.38 trillion. The latest figures therefore represent a steep expansion of the national debt profile within a relatively short period, intensifying public debate over the direction of economic reforms.

The expansion in debt is linked to a combination of domestic borrowing, external loans, and exchange rate depreciation.

A major contributor was the securitisation of the Central Bank of Nigeria’s Ways and Means advances, where about ₦7.3 trillion in overdrafts was converted into longer-term bonds following approval by the National Assembly in late 2023. While the move was intended to restructure short-term liabilities, it added significantly to the official debt stock.

External debt has also continued to rise, increasing to about $51.86 billion by December 2025 from $45.78 billion in 2024. Nigeria’s foreign obligations are largely tied to multilateral lenders such as the World Bank’s International Development Association (IDA), the African Development Bank (AfDB), and Eurobond investors.

In addition, currency depreciation has significantly increased the naira value of foreign-denominated loans, further inflating total debt figures when converted into local currency.

The federal government has defended its borrowing strategy, arguing that it is necessary to address Nigeria’s long-standing infrastructure deficit.

Minister of Works, David Umahi, has stated that a significant portion of ongoing infrastructure projects were inherited from previous administrations and require sustained funding for completion.

Key projects linked to government borrowing include the Lagos–Calabar Coastal Highway, Sokoto–Badagry Highway, Calabar–Abuja corridor, and the Akwanga–Jos–Bauchi–Gombe–Maiduguri route.

Officials maintain that these projects are central to improving national connectivity, boosting commerce, and strengthening security across regions.

Despite these explanations, concerns continue to grow over the scale of borrowing and the visible impact on ordinary Nigerians.

Analysts and public commentators are questioning what measurable economic improvements have followed the rapid increase in public debt, particularly in areas such as employment, electricity supply, transportation costs, and inflation control.

There are also renewed questions over the petrol subsidy removal, which was expected to ease fiscal pressure and improve government savings. Critics are asking how much of the anticipated savings have been retained or transparently reflected in public accounts, especially as borrowing has continued to rise alongside worsening cost-of-living conditions.

While government officials insist that funds are being directed toward infrastructure and reform programmes, the gap between policy expectations and economic realities has continued to fuel public debate over fiscal transparency and spending priorities.

Nigeria’s debt profile remains heavily dependent on a mix of Eurobond investors, concessional multilateral loans, and domestic borrowing instruments such as Federal Government bonds and Sukuk.

While concessional financing offers relatively lower interest rates, Eurobond exposure introduces vulnerability to global market volatility and exchange rate fluctuations.

Despite assurances that Nigeria’s debt-to-GDP ratio remains within internationally acceptable thresholds, analysts warn that debt servicing pressures remain a key concern.

Reports indicate that Nigeria’s debt service obligations have, in some periods, exceeded government revenue, raising questions about fiscal sustainability.

In one reported instance in early 2025, debt servicing outflows were higher than monthly retained revenue, underscoring the strain on public finances and limiting fiscal space for development spending.

As the administration continues its economic reform agenda, the central challenge remains balancing rising debt obligations with tangible improvements in living standards.

Analysts say the success of the current fiscal strategy will ultimately depend on whether infrastructure investments translate into productivity gains and revenue growth capable of offsetting Nigeria’s expanding debt burden.