Nigeria’s debt hits N166.79tn, analysts examine fresh $1.5bn World Bank loan

Nigeria’s rising public debt has triggered fresh concerns among economists and financial experts as the country considers securing a new $1.5 billion loan from the World Bank.

The Debt Management Office (DMO) has published updated debt data for June 30, 2026, including federal domestic and external debt positions, amid renewed debate over the sustainability and productive use of government borrowing.

According to the figures cited, Nigeria’s total debt stock stood at N166.79 trillion, with external debt rising to $54.52 billion and domestic debt increasing to N91.59 trillion.

The development has intensified scrutiny of the government’s borrowing strategy, particularly as debt-service obligations continue to consume significant public resources.

The DMO recently released its second-quarter 2026 debt-service data, alongside its report on federal domestic debt servicing between April and June.

The latest figures have also drawn criticism from opposition figures, including former Vice President Atiku Abubakar of the African Democratic Congress (ADC), who has called on the Federal Government to explain the economic impact and justification for additional borrowing before contracting a fresh $1.5 billion facility.

ActionAid Nigeria has similarly raised concerns about the country’s debt-servicing burden, arguing that increasing debt obligations could constrain resources available for social and developmental programmes.

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Borrowing must produce measurable returns — Oyedokun

Professor of Accounting at Lead City University, Godwin Oyedokun, said Nigeria’s growing debt stock requires closer scrutiny, but argued that the debate should focus not simply on the volume of borrowing but on what the funds are used for.

He said the proposed $1.5 billion World Bank facility should be assessed based on its purpose, cost, repayment terms and expected economic returns.

“The proposed additional $1.5 billion should be assessed against its purpose, cost, repayment terms and, most importantly, whether it will finance productive investments that generate jobs, revenue and economic growth rather than recurrent expenditure,” he said.

Oyedokun noted that borrowing could support economic development when funds are transparently deployed to productive sectors.

“The concern is not simply opposition to every new borrowing. The critical issue is the quality and accountability of how borrowed funds are deployed,” he said.

He said World Bank financing had historically supported programmes in areas including investment, job creation, agriculture and MSME development, but stressed that access to financing alone was insufficient.

“What matters is what the borrowed funds are used for, how effectively they are deployed and whether they generate sufficient economic value to justify the repayment burden,” he said.

According to him, continued borrowing without corresponding economic returns could reduce Nigeria’s future fiscal space and limit government’s ability to finance education, healthcare, infrastructure and employment.

He therefore called for a debt-to-development strategy under which every major borrowing would be linked to measurable economic outcomes.

“Nigeria needs a clear debt-to-development strategy. Every significant borrowing should have measurable economic returns, transparent utilisation, strict project monitoring and a credible repayment plan,” Oyedokun said.

Economist and Chief Executive Officer of SD & D Capital Management, Gbolade Idakolo, expressed concern over the pace of Nigeria’s borrowing and the associated cost of debt servicing.

Idakolo said borrowing had increased under President Bola Tinubu, while the benefits of the government’s economic reforms were yet to be sufficiently felt by many Nigerians.

“The past three years of President Bola Tinubu have witnessed increased borrowing, which has led to a very high cost of debt servicing.

“Despite the very harsh economic reforms to strengthen the economy, the impact is largely not felt by ordinary Nigerians,” he said.

He argued that borrowing for infrastructure and other development projects should translate into visible improvements in citizens’ welfare.

“The principle of borrowing for infrastructural development must be matched with commensurate benefits to the citizenry, which is lacking at the moment,” he said.

Idakolo also questioned the effectiveness of the country’s debt-management framework, urging stronger measures to prevent excessive accumulation of liabilities.

He warned that continued expansion of the debt burden could leave Nigeria with less fiscal room to respond to major economic shocks.

“The DMO, which manages Nigeria’s debt structure, has also not strategically been up to the task in ensuring that the Federal Government does not overshoot the debt ratio,” he said.

He called for a reduction in Nigeria’s dependence on borrowing to avoid placing an increasingly heavy repayment burden on younger generations.

“It is very imperative that Nigeria tame its loan appetite in order not to mortgage the future of young Nigerians,” Idakolo said.

The debate comes as the DMO continues to publish updated debt-stock and debt-service data, underscoring the growing importance of how Nigeria balances additional borrowing against revenue generation, economic growth and its capacity to meet existing obligations.