Nigeria’s Public Debt Hits N149.39 Trillion as Currency Weakens, Borrowing Rises
Debt surges by N27.72 trillion in one year, as naira depreciation and fresh borrowings drive cost of external obligations
Nigeria’s total public debt has risen sharply to N149.39 trillion as of March 31, 2025, reflecting a 22.8% year-on-year increase, according to new data released by the Debt Management Office (DMO).
The figure marks a N27.72 trillion rise from the N121.67 trillion recorded in Q1 2024, and a quarter-on-quarter increase of N4.72 trillion from December 2024.
The debt surge has been attributed to increased borrowing and the sharp depreciation of the naira, which significantly inflated the local currency value of Nigeria’s external debt obligations.
As of Q1 2025, external debt stood at N70.63 trillion (approximately $45.98 billion), up from N56.02 trillion ($42.12 billion) a year earlier—representing a 26.1% rise in naira terms. While the dollar value of external debt increased by $3.86 billion, the sharp jump in naira valuation underscores the financial pressure caused by currency volatility.
Although the Central Bank of Nigeria (CBN) used an exchange rate of N1,330.26 per dollar in Q1 2024, the official rate used for 2025 was not disclosed. However, analysts suggest that the steep naira valuation of debt indicates further weakening of the currency. Nigeria’s external borrowing includes loans from multilateral institutions such as the World Bank, African Development Bank, and commercial creditors, including Eurobond holders.
On the domestic front, debt climbed to N78.76 trillion ($51.26 billion) from N65.65 trillion ($49.35 billion) in Q1 2024—an increase of N13.11 trillion or 20% year-on-year. Compared to Q4 2024, domestic debt rose by N4.38 trillion or 5.9%. The Federal Government accounted for the bulk with N74.89 trillion, while the 36 states and the Federal Capital Territory (FCT) held N3.87 trillion. This marks a slight decline in subnational debt, suggesting improved debt management or reduced borrowing among states.
Domestic borrowings were raised through government instruments such as Treasury Bills, FGN Bonds, Sukuk, and Green Bonds. While these instruments are insulated from currency swings, they carry substantial interest burdens.
According to the DMO, domestic debt now makes up 52.7% of Nigeria’s total debt, while external debt accounts for 47.3%. This reflects a slight shift from March 2024, when domestic borrowing held a 54% share. The growing share of external debt—measured in naira—highlights increasing currency-related risks as Nigeria leans on foreign loans to plug budget deficits.
With the total debt stock approaching the N150 trillion mark, economists have raised red flags about the sustainability of Nigeria’s fiscal path. Rising debt servicing costs are putting pressure on the federal budget and raising concerns about limited fiscal space for development spending.
As Nigeria continues to navigate a tough macroeconomic climate, observers are calling for urgent reforms in public finance management, revenue generation, and prudent debt utilization to avoid deepening the country’s debt crisis.
