Financial experts and economists have raised concerns over Nigeria’s N149.39 trillion debt profile at the end of the first quarter of 2025 without a commensurate impact on the country’s infrastructure, economy, and the well-being of citizens.
The Debt Management Office debt figure released last Friday showed that Nigeria’s debt stock increased by N27.72 trillion, or 22.8 percent, from N121.67 trillion in the corresponding period in 2024.
The data indicated that the country’s debt of N149.39 trillion reflects a N4.72 trillion, or 3.3 percent, increase from N144.67 trillion as of December 31, 2024.
Accordingly, DMO data noted that external debt increased by N14.61 trillion, or 26.1 percent, to N70.63 trillion ($45.98 billion) at the end of the first quarter of 2025, compared to N56.02 trillion ($42.12 billion) in the same period last year.
On a quarter-on-quarter basis, the country’s external debt rose by an increase of N344bn, or 0.5 percent, when compared to N70.29 trillion in December 2024.
On domestic borrowing, Nigeria’s debt stock climbed by N13.11 trillion, or 20 percent, to N78.76 trillion ($51.26bn) in March 2025, up from N65.65 trillion ($49.35bn) last year.
Of the domestic debt, the Federal Government accounted for N74.89 trillion, while subnational governments and the FCT held N3.87 trillion.
Equally concerning is Nigeria’s debt-to-revenue ratio, which has reached alarming levels in recent years.
The figures between 2022 and 2024 reveal that the government spent N25.12 trillion on debt servicing while earning N20.6 trillion in revenue.
This means debt service alone surpassed total revenue by roughly N4.5 trillion in that period, a fundamentally unsustainable trajectory.
Reacting, Mazi Okechukwu Unegbu, a former president of the Chartered Institute of Bankers of Nigeria (CIBN), and the Chief Executive Officer of SD & D Capital Management, Gbolade Idakolo, and a don at Lead City University in Ibadan, Prof. Godwin Oyedokun, in separate interviews with DAILY POST on Monday, faulted the country’s rising debt profile.
Rising loan profile has no tangible impact on Nigeria’s economy- Unegbu
On his part, Unegbu said that despite the rising debt profile, there has not been much improvement in the country’s infrastructure and the economy.
“The country’s debt keeps rising. It means that the government has little inclination to reduce its debt figure. We have borrowed so much, but the country’s infrastructure, such as roads and economic realities, has remained unchanged.
“As far as I am concerned, there is no improvement in the country’s economy.
“Though, people are afraid to criticize the government because they don’t want to tell the truth. When the true nature of the economy blows open, we will all be in trouble.”
He urged the government to reduce the debt burden for its local development.
“My advice to the government is to try and reduce domestic debts.
“It is important for the development of our local economy. It is disturbing that most indicators of the economy are not improving”, he told DAILY POST.
Nigerian govt must stop borrowing to fund ‘political projects’ – Idakolo
Idakolo said the government at all levels must stop borrowing to fund political projects that do not impact the lives of citizens.
“Nigeria’s rising debt profile calls for concern, especially when we are seeing over a 22% rise in over one year.
“The debt stock has been growing steadily from 2022 to date, and the federal government needs to do a forensic analysis of the impact of the borrowing on infrastructural developments.
“Presently, according to the DMO (Debt Management Office), total public debt to GDP was estimated to be around 54 percent in 2024 and is expected to grow in the 2025 fiscal year.
“The previous administration laid a foundation of an alarming debt profile, which has been inherited by the Bola Tinubu administration, and his government is further increasing the borrowing.
“The Buhari administration had little to show for the humongous debt profile during his tenure, coupled with shrinking revenue at that time.
“The present administration has made some drastic economic decisions to free funds for government expenditure and has embarked on an aggressive revenue drive with a new tax regime already signed into law to boost government income.
“Despite the improvement seen in the monetary policy of the CBN to combat inflation, revenue has not been able to match debt servicing, which has led to continuous borrowing to fill existing funding gaps.
“The federal government needs to embark on revenue-generating projects that can conveniently repay loans taken to execute such infrastructural projects instead of political projects that cannot repay huge government funds expended on them.
“If the government must increase borrowing, then a feasible fiscal plan must be in place to realistically increase revenue generation,” he said.
Nigeria’s N149.39tn debt sobering – Prof Oyedokun
Oyedokun noted that the Debt Management Office’s recent announcement that Nigeria’s total public debt has surged to N149.39 trillion is a sobering development.
“This dramatic escalation inevitably raises critical questions about the tangible and intangible returns Nigeria is realising from such unprecedented borrowing.
“There is a well-known maxim in public finance that nothing weakens a government more than a loan that is not well used.
“Sadly, this resonates deeply with Nigeria’s current fiscal reality. While borrowing can be a legitimate tool for financing development, its sustainability rests entirely on how effectively the funds are utilised.
“Roads, electricity, water infrastructure, health, and education should be the visible dividends of debt-funded projects.
“However, the experience for many Nigerians remains one of persistent power shortages, deplorable roads, rising poverty, and an economy grappling with inflation and currency instability.
“If these borrowed funds do not translate into productive capital investments that stimulate growth, improve livelihoods, and generate revenue, they merely deepen the country’s debt trap.
“When a country spends more on servicing existing debt than it generates in revenue, it risks crowding out critical social and capital expenditures, stifling growth, and eroding public confidence.
“It also constraints fiscal flexibility, leaving little room to absorb economic shocks or invest in priority sectors.
“Moving forward, Nigeria urgently needs a two-pronged strategy:
“Prioritise Value-Driven Borrowing: Every naira borrowed must be tied to projects with clear economic benefits and measurable outcomes. Borrowing should focus on infrastructure and sectors that generate multiplier effects for jobs, productivity, and revenue;
“Improve Revenue Generation and Fiscal Discipline: Nigeria must expand its revenue base beyond oil through effective taxation, prudent management of state-owned enterprises, and tackling leakages. Fiscal discipline and transparency are equally essential to ensure funds are not diverted or wasted.
“In conclusion, debt in itself is not inherently bad. However, debt without purpose, accountability, and measurable impact is a heavy millstone that weakens national capacity and mortgages the future.
“The time for rhetoric has passed; Nigeria must urgently align its borrowing with visible national development and robust fiscal sustainability.”
