Nigeria’s Debt-to-GDP ratio falls to 39.4% after GDP rebasing

Nigeria’s public debt-to-GDP ratio fell to 39.4 per cent in the first quarter of 2025, following a comprehensive rebasing of the country’s Gross Domestic Product (GDP) by the National Bureau of Statistics (NBS).

While the new data signals improved debt sustainability on paper, economic experts caution that the country’s fiscal outlook remains fragile amid rising borrowing and external debt pressures.

This recalibration raised Nigeria’s nominal GDP to N379.17 trillion for the 12-month period ending the first quarter of 2025, compared to N277.49 trillion before the rebasing.

According to the Debt Management Office (DMO), Nigeria’s total public debt as of March 31, 2025, stood at N149.39 trillion. This includes N78.76 trillion in domestic debt and N70.63 trillion in external debt.

The new GDP figure places the debt-to-GDP ratio at 39.4 per cent, slightly below the government’s 40 per cent self-imposed ceiling and comfortably within the 55  benchmark set by the World Bank and IMF.

Prior to rebasing, Nigeria’s debt-to-GDP ratio was significantly higher at 52.13 per cent, raising alarms about fiscal sustainability. The rebased figures have now improved investor sentiment and eased concerns about debt limits, at least statistically.

Dr. Andrew Neji, senior research economist at the Centre for Fiscal Policy and Development, said: “While the rebasing lowers the debt ratio on paper, it does not change Nigeria’s repayment obligations. We’re still facing rising debt service costs, especially in foreign currency, which are aggravated by the naira’s depreciation.”

Prof. Mary Okon, a public finance analyst at the University of Abuja, warned: “Rebasing helps optics and can support Nigeria’s fiscal narrative to lenders, but the fundamentals remain shaky. Actual borrowing has risen by over N27 trillion in just one year, which is not sustainable without corresponding revenue growth.”

Samuel Obadina, a Lagos-based financial analyst, added: “The improved debt-to-GDP ratio might embolden the government to borrow more under the guise of fiscal space. But that’s risky unless there’s better debt management and increased capital project execution.”

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Despite the improved ratios, Nigeria’s debt stock has continued its upward trend. The total public debt rose by N4.72 trillion (3.3 per cent) quarter-on-quarter from N144.67 trillion in the first quarter of 2024, and by N27.72 trillion (22.8 per cent) year-on-year compared to N121.67 trillion in the first quarter of 2024.

Much of the increase is driven by fresh domestic borrowing and the weakening naira, which inflates the value of foreign debt in naira terms.

The updated fiscal metrics are expected to play a critical role in shaping Nigeria’s 2026–2028 Medium-Term Expenditure Framework (MTEF). The lower debt ratio could offer the government more headroom for borrowing to finance infrastructure and stimulate growth.

Still, analysts stress the importance of increasing revenue generation, improving public financial management, and curbing recurrent expenditure.