Regardless of rising alarm over Nigeria’s surging debt profile, the Federal Authorities has borrowed ₦10.85 trillion from home traders between January and April 2025, ignoring world warnings about its unsustainable fiscal path.
In response to knowledge from the Debt Administration Workplace (DMO), this contemporary spherical of borrowing pushed the nation’s whole public debt up by 48.6%, reaching ₦144.66 trillion in 2024 from ₦97.34 trillion the earlier yr. The Federal Authorities alone is accountable for ₦137.28 trillion, about 95% of the full.
Worryingly, Nigeria spent 150% of its whole income on debt servicing in 2024, greater than double the 65% recorded in 2023. Home debt servicing rose 12% year-on-year to ₦5.9 trillion, whereas exterior servicing climbed 33% to $4.7 billion, up from $3.5 billion in 2023.
This {financial} pressure additional weakened the nation’s debt sustainability, with the debt-to-GDP ratio worsening to 52.9% in 2024 from 48.7% in 2023.
The borrowing spree, nevertheless, exhibits no signal of slowing down. Evaluation of FGN bond and treasury invoice auctions carried out by the DMO and Central Bank of Nigeria revealed a slight 0.7% improve in borrowing from ₦10.767 trillion within the first 4 months of 2024 to ₦10.85 trillion throughout the identical interval in 2025.
Treasury payments accounted for a big chunk of the brand new debt, rising 8.3% to ₦8.38 trillion within the first 4 months of 2025.
FGN Financial savings Bonds additionally spiked, leaping almost 50% to ₦17.29 billion. The figures present a fluctuating however persistent upward development in short-term borrowing.
Investor demand stays excessive. Over-subscriptions to DMO bond choices reached ₦3.33 trillion in opposition to the ₦1.45 trillion provided inside the 4 months. For instance, in February, bonds value ₦350 billion attracted an enormous ₦1.63 trillion in subscriptions.
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In the meantime, the Worldwide Financial Fund has raised issues. It warned that Nigeria’s borrowing technique is out of step with present world dangers and suggested the federal government to rein in spending.
In its April 2025 Fiscal Monitor, the IMF harassed the necessity for fiscal self-discipline amid a projected world debt improve.
“Fiscal coverage ought to prioritize decreasing public debt and establishing and widening buffers to deal with spending pressures and {economic} shocks,” the report acknowledged.
Whereas the IMF expects Nigeria’s debt-to-GDP ratio to dip barely to 52.5% in 2025, it tasks that the nation’s fiscal deficit will worsen to 4.5% from 3.4% in 2024.
At a press briefing through the IMF–World {Bank} Spring Conferences, Davide Furceri, Deputy Division Chief on the IMF Analysis Division, urged Nigeria to behave extra prudently.
“It’s necessary to create further fiscal house. In Nigeria’s case, meaning specializing in two issues: first, boosting income via improved mobilization efforts, and second, scaling up spending in key areas like social safety and funding,” Furceri mentioned.
“We perceive that many international locations, together with Nigeria, face urgent spending wants. However spending should be achieved properly. This implies stronger prioritization and larger effectivity in how sources are allotted,” he added.
But, with home traders nonetheless desirous to lend and the federal government relying closely on debt to remain afloat, Nigeria’s fiscal future stays unsure.
