Debt

By Daniel Nduka Okonkwo

Nigeria’s debt clock has surged to ₦159.28 trillion, a figure that translates to roughly ₦724,000 per citizen when spread across a population of more than 220 million. This arithmetic alone underscores the scale of the nation’s obligations. While official voices emphasise that the debt-to-GDP ratio remains within accepted thresholds, the underlying reality is sobering: the country’s current account is being financed through persistent domestic borrowing and mounting external debt. Each statistic is a reminder that today’s fiscal gaps are tomorrow’s responsibilities, with the burden of development increasingly shifted onto generations yet unborn.

Is there a way out for Nigerians? The path forward demands more than borrowed billions. It requires a fundamental reassessment of how resources are managed, how revenue is diversified, and how structural weaknesses are addressed. While the figures may suggest sustainability on paper, the lived reality reflects rising costs, shrinking opportunities, and a future increasingly tied to creditor obligations. Breaking this cycle will require bold reforms, transparent governance, and a commitment to building an economy driven by productivity rather than dependence on borrowing.

When distributed across the population, the debt translates to roughly ₦700,000 to ₦725,000 per citizen. This figure is only a statistical illustration and not a legal obligation on individuals. Public debt remains a sovereign responsibility shared by the Federal Government, state governments, and the Federal Capital Territory, and it is serviced through public revenue rather than direct payments by citizens.

As of late 2025, Nigeria’s total public debt stood at approximately ₦159.28 trillion, equivalent to about $103 billion to $111 billion depending on the exchange rate applied. This represents an increase from about ₦144.7 trillion in 2024, reflecting continued reliance on borrowing to finance fiscal deficits.

Nigeria’s debt stock consists of both domestic and external borrowing. Domestic debt is estimated at ₦84-₦85 trillion, while external debt stands at ₦74 trillion. Persistent budget deficits have driven the growth in total debt, increased domestic borrowing through treasury bills and government bonds, and led to exchange rate depreciation, raising the value of the naira against external obligations. By mid-2025, total debt had reached about ₦152.39 trillion before rising further to ₦159.28 trillion by year-end.

Debt servicing remains a more pressing concern than the size of the debt itself. In 2025, debt servicing costs rose to approximately ₦15.8 trillion, up from about ₦12.8 trillion in 2024. Higher interest rates on domestic debt instruments largely drove this increase. Servicing costs for domestic debt rose sharply due to increased yields on treasury bills and Federal Government bonds. At certain points in 2025, the debt service-to-revenue ratio exceeded 80 per cent, meaning that a substantial portion of government revenue was used to service existing debt.

Looking ahead, Nigeria’s 2026 fiscal outlook reflects continued pressure on public finances. The proposed budget projects total expenditure of about ₦58.5 trillion against expected revenue of approximately ₦33.2 trillion, leaving a fiscal deficit of about ₦25 trillion. This gap is expected to be financed largely through additional borrowing, which could push total public debt beyond ₦160 trillion.

Planned borrowing includes external loans estimated at $6 billion, along with an additional $516 million under consideration. However, claims suggesting approvals equivalent to ₦68 trillion appear inconsistent and are likely the result of conversion or reporting errors rather than actual borrowing approvals.

The comparison between Nigeria’s per capita debt of roughly ₦724,000 and the national minimum wage of ₦70,000 is largely symbolic but highlights deeper economic realities. It reflects low-income levels, rising cost of living, and mounting pressure on public finances. It does not imply that citizens are personally responsible for repaying the debt.

Nigeria’s debt-to-GDP ratio, estimated at 35 per cent to 37 per cent, remains below the commonly referenced 60 per cent threshold. However, experts consistently stress that revenue constraints, rather than debt size alone, represent the country’s most significant fiscal risk.

Key concerns include the high share of revenue devoted to debt servicing, limited fiscal space for critical sectors such as infrastructure, health, and education, and potential inflationary risks if deficit financing continues to expand. Exchange rate volatility also affects the dollar value of external debt, adding further complexity to fiscal management.

Nigeria’s public debt, now approaching ₦160 trillion, is not excessive relative to GDP. However, the cost of servicing that debt and the country’s limited revenue base present a growing fiscal challenge. The per capita framing helps illustrate the scale of the burden, but the central issue remains how effectively borrowed funds translate into economic growth and improved living conditions.

As borrowing continues, the sustainability of Nigeria’s fiscal path will depend less on the amount owed and more on how effectively the economy generates the revenue required to support those obligations.

Daniel Nduka Okonkwo is a Nigerian investigative journalist, publisher of Profiles International Human Rights Advocate with Daniels Entertainment, a policy analyst, and human rights activist. He writes from Nigeria and can be reached at dan.okonkwo.73@gmail.com.

By Nasiru Ibrahim 

Nigeria’s debt situation has become more confusing and concerning in recent years. After removing fuel subsidies, which had always been used to justify heavy borrowing, many expected a change in direction. But surprisingly, debt has continued to rise—and sharply. 

In less than two years, Bola Ahmed Tinubu’s administration has added over ₦62 trillion to our total debt. This comes on top of Muhammadu Buhari’s already heavy debt legacy. Yet if you check the 2025 budget, it still carries a huge deficit. This is despite relatively stable oil prices and a slight improvement in crude oil production. So, something is clearly not adding up.

How can a country that has removed one of its biggest expenditures—fuel subsidies—still be borrowing more than ever? Is it that the revenue reforms aren’t working, or is this a deeper issue with how we manage our economy? These are real questions that need honest answers. The reality is that Nigeria’s current borrowing trend is worrying not just because of the amount, but also because of the manner in which it’s happening and what it reflects.

According to the Debt Management Office, as of March 31, 2025, Nigeria’s public debt stood at ₦149.39 trillion. Tinubu alone has added ₦62.01 trillion to that figure in under two years. Now, let’s compare that with previous administrations: Goodluck Jonathan borrowed ₦5.9 trillion in five years. Buhari borrowed ₦74.78 trillion in eight years—including the controversial “Ways and Means” borrowing from the Central Bank of Nigeria (CBN). That’s how bad things have gotten.

“Ways and Means” are short-term loans from the Central Bank to the Federal Government, intended to cover urgent expenses such as paying salaries or addressing unexpected shortfalls. Think of it like an overdraft facility. But the law is clear—the CBN Act, 2007 (Section 38) states that the Federal Government can only borrow up to 5% of the previous year’s revenue from the CBN, and it must be repaid in the same year. Under Buhari, this law was ignored. His government borrowed ₦22.7 trillion through Ways and Means, without obtaining proper approval from the National Assembly.

This ₦22.7 trillion had not been reflected in official debt figures for a long time. It only became part of Nigeria’s domestic debt record in May 2023, when Buhari’s government securitised it—basically converted it into long-term bonds. That move alone caused the total public debt to jump from ₦44.06 trillion at the end of 2022 to ₦87.38 trillion by June 2023. That’s a massive increase in just six months.

Now, some economists argue that Tinubu’s debt figures appear worse primarily due to the exchange rate. That argument is simple: Nigeria borrows in foreign currencies, such as the dollar, euro, or yuan, but records the debt in naira. So when the naira weakens, the same dollar loan becomes much bigger in naira terms.

Let’s look at the exchange rate across administrations. Under Jonathan, the exchange rate was around ₦ 157 to $1 in 2015. Under Buhari, the exchange rate was ₦770/$ in 2023. And under Tinubu, the exchange rate is now approximately ₦1536/$ as of 2025. So when you convert the same external loan, the naira value explodes as the currency weakens. Just this exchange rate movement has added ₦29.75 trillion to Tinubu’s external debt and ₦5.9 trillion to Buhari’s.

To properly check if the debt spike is mainly due to FX changes, let’s fix the exchange rate at ₦157/$ for all the administrations and see how much was actually borrowed. The formula is simple:

Old Dollar Debt × New Exchange Rate – Old Dollar Debt × Old Exchange Rate.

Using the DMO’s external debt figure of $38.81 billion in 2023:
$38.81bn × ₦770 = ₦29.85 trillion
$38.81bn × ₦1536 = ₦59.63 trillion
₦59.63 trillion – ₦29.85 trillion = ₦29.78 trillion

So, if the exchange rate had remained at ₦157/$, Nigeria’s external debt of $42.46 billion in 2025 would have been approximately ₦6.6 trillion. Under that fixed exchange rate, Jonathan’s total external borrowing would have been approximately ₦1.07 trillion over five years. Buhari’s about ₦4.48 trillion in eight years.

Tinubu’s about ₦1.12 trillion in under two years. This means if Tinubu continues at this pace, he’ll hit Buhari’s figure—₦4.48 trillion—in about eight years. Yes, the exchange rate plays a significant role. But that’s not the whole story.

Others argue that Tinubu’s debt problem is not just about FX. It’s also about spending discipline. Unlike Buhari, Tinubu removed fuel subsidies and slightly increased oil production (1.5–1.6 million barrels per day, compared to Buhari’s average of 1.2–1.3 million barrels), and customs and tax revenue also improved. Buhari faced more challenging conditions—global oil crashes, two recessions in 2016 and 2020, the COVID-19 pandemic, and high subsidy payments—during his early years. So, Tinubu had more room to save, but instead, borrowing has increased.

The 2025 budget projects a deficit of ₦13.08 trillion. It assumes oil at $77.96 per barrel and production of 2.06 million barrels per day. However, in reality, March production was only 1.65 million barrels per day, including condensates. And as of July 8, Brent crude was $70.20 and WTI was $68.42—both below the assumed price. That means revenue projections may fall short, and the government will likely borrow even more.

Tinubu has already requested $21.6 billion in new loans. In May 2025, Reuters reported that he also asked the National Assembly to approve loans of €2.2 billion, ¥15 billion (approximately $104 million), and an additional $2 billion in domestic loans. That’s not all.

The Federal Government also secured a $747 million syndicated external loan to fund Phase 1, Section 1 of the Lagos-Calabar Coastal Highway—from Victoria Island to Eleko Village. At ₦1536/$, this loan adds ₦1.147 trillion to the debt. The lenders include Deutsche Bank, First Abu Dhabi Bank, Afreximbank, and Zenith Bank, among others. The Islamic Corporation for the Insurance of Investment and Export Credit (ICIEC) is providing insurance. That brings Tinubu’s total borrowing to about ₦63.157 trillion in under two years.

This highway is being built under a Public-Private Partnership using an EPC+F model. The road is over 70% complete and is designed using CRCP technology—concrete with a 50-year lifespan and low maintenance requirements. While the loan adds to debt, it shows some confidence from global investors and introduces a financing model that shares risk between the government and private firms.

Now to the bigger picture. As of 2024, Nigeria’s debt-to-GDP ratio is around 25.1%, based on ₦144.67 trillion in debt and a nominal GDP of about $375 billion. That means debt accounts for about one-quarter of the economy—not yet alarming, but becoming risky if borrowing continues at this rate. What’s more worrying is the cost of servicing debt.

In 2024, debt service took up 4.1% of GDP—up from 3.7% in 2023 (AfDB report). That’s a lot. Imagine 4.1% of the entire economy going towards just paying off debt, instead of building schools, roads, or hospitals. Even worse, the debt service-to-revenue ratio rose from 76.86% in 2023 to 77.4% in 2024 (APA News). This means more than three-quarters of government revenue is now used to repay debt. That leaves very little for anything else. That’s not sustainable.

As Economics graduates, the way forward is clear. First, we need to depoliticise how we manage public finances. Countries like Chile, Sweden, and the UK have independent Fiscal Councils that enforce rules like debt limits and balanced budgets. Nigeria needs something like that to restore discipline and rebuild investor trust.

Second, loans must be tied to development goals—not used for consumption. Borrowing should be used for essential services like roads, electricity, and digital infrastructure, rather than paying salaries or covering bloated administrative costs. Rwanda and Ethiopia have shown how debt used for infrastructure can boost exports and growth. A cost-benefit analysis should accompany every loan.

Third, we must cut waste and off-budget liabilities. That includes fuel subsidies, failing state-owned enterprises, and unauthorised bailouts. Ghana passed a Fiscal Responsibility Act in 2018, capped its deficit at 5% of GDP, and ran audits that exposed massive leakages. Nigeria can cut borrowing by 30–40% just by following that path.

Fourth, improve tax collection—not by harassing small traders, but through fairness and the use of technology. Indonesia raised its tax-to-GDP ratio by digitising filing, automating risk detection, and linking tax IDs with national identity numbers. Nigeria can do the same—target high earners and multinationals instead of informal workers.

Fifth, public-private partnerships and syndicated loans, such as the Lagos-Calabar road, shouldn’t be used to conceal debt. They should help us attract private capital, share risks, and deliver real development. Countries like Morocco and Kenya make their PPP contracts public. Nigeria should also strive for greater transparency.

Finally, if things get out of hand, we can consider debt restructuring—but only as a last resort and if tied to fundamental reforms. Ghana restructured its debt in 2023 by extending maturities and cutting interest under IMF guidance. But what made it work was reform—cutting subsidies and improving tax systems. Without reform, restructuring solves nothing.

This is the time for Nigeria to act. If we continue on this path, we are only postponing a more profound crisis. But with the right decisions, we can still change direction.

Ibrahim is a graduate of Economics from Bayero University, Kano. He can be reached via nasirfirji4@gmail.com.

By Muhammad Abubakar

Nigeria has officially cleared its outstanding debt to the International Monetary Fund (IMF), marking a significant milestone in the country’s economic recovery efforts. This development follows a series of substantial repayments totalling $1.22 billion between the fourth quarter of 2023 and the second quarter of 2024, reducing Nigeria’s IMF debt from $3.26 billion in June 2023 to $1.16 billion by June 2024.

The IMF has acknowledged Nigeria’s commitment to meeting its financial obligations, noting that the country has no overdue payments as of April 30, 2024. This achievement reflects the government’s dedication to fiscal responsibility and economic reform.

In a statement, IMF First Deputy Managing Director Gita Gopinath commended Nigeria’s efforts, stating that the country’s debt level is “moderate and not high risk,” provided that sound economic policies are maintained. She emphasised the importance of continued domestic revenue mobilisation and targeted social interventions to sustain this progress.

Nigeria’s Finance Minister, Wale Edun, highlighted the government’s initiatives to enhance social investment programmes and strengthen domestic resource mobilisation through tax reforms and digitalisation. He also noted increased crude oil production, significantly boosting national revenue.

This financial turnaround positions Nigeria to engage more robustly with international financial institutions and investors, potentially attracting increased foreign investment and fostering economic growth.

The successful clearance of IMF debt underscores Nigeria’s commitment to economic stability and sets a positive precedent for other nations facing similar challenges.

By Uzair Adam Imam

Shehu Sani, the former Senator representing Kaduna Central, has raised the alarm over the suffocating debt burden gripping Kaduna State under the administration of former Governor Nasir El-Rufai.

Sani expressed regret that his warnings against El-Rufai’s aggressive borrowing were ignored, leading the state into a financial crisis of significant proportions.

Speaking to reporters, Sani highlighted the dire consequences of the debt accumulation, emphasizing that if his advice had been heeded, the state would not be grappling with the current predicament.

He recalled facing criticism for opposing a $350 million World Bank loan sought by the El-Rufai administration, foreseeing the looming challenges now faced by the state.

Governor Uba Sani, in a recent town hall meeting, disclosed that the state inherited a staggering debt of $587 million, ₦85 billion, and ₦115 billion in contractual liabilities from the previous administration.

This heavy financial burden has severely hampered the state’s ability to meet its financial obligations, including salary payments.

The current administration disclosed that a substantial portion of the state’s federal allocation is being diverted toward servicing the debt, leaving insufficient funds for essential expenditures such as salary payments.

With the sharp increase in exchange rates, the amount being repaid has almost tripled, exacerbating the financial strain on the state.

Out of the N10 billion received as federal allocation in March, N7 billion was deducted to service the state’s debt, leaving only N3 billion available.

However, this amount falls short of covering the state’s monthly salary bill of N5.2 billion, further exacerbating the financial crisis.

Sani cautioned that the repercussions of the state’s debt burden are now being felt acutely, underscoring the urgent need for concerted efforts to address the financial challenges facing Kaduna State.

By Uzair Adam Imam 

The Kano State Fire Service successfully intervened on Thursday to save a 37-year-old man, Saifullah Rabiu, who was on the verge of hanging himself from a tree. 

The rescue came following a distressing suicide note left by Rabiu, attributing his extreme action to a staggering debt of N2 million incurred during the process of obtaining a foreign visa. 

The Kano State Fire Service spokesperson, Saminu Abdullahi, confirmed the incident in a statement to the media. 

The emergency unfolded when the fire service’s Central Control Room received a call around 10:07 a.m. from the Ministry of Works and Housing in Kano State.

The location reported was State Road, near Nasarawa Emir’s house. 

Swiftly responding to the call, the fire department mobilised its standby personnel, reaching the scene by 10:10 a.m. 

There, they discovered Saifullah Rabiu in a critical condition, poised to carry out his tragic decision. 

In his suicide note, Rabiu detailed the overwhelming debt he owed, revealing that he had already repaid a significant portion of the borrowed amount, approximately N500,000. 

The note narrated the distressing impact of the creditor’s actions, which had driven him to contemplate suicide. 

Following the successful rescue, Saifullah Rabiu was handed over to Divisional Crime Officer Zaharaddini of the Farm Centre Police Division for further investigation. 

The incident sheds light on the profound consequences of financial struggles and the urgent need for mental health support in addressing such crises.