Nigeria’s Public Debt Surges to N149.39 trillion by End of March 2025
Nigeria’s public debt reached ₦149.39 trillion by the end of Q1 2025, reflecting a year-on-year surge of ₦27.72 trillion—an increase of 22.8% compared to the ₦121.67 trillion reported in the same quarter of 2024.
Figures released by the Debt Management Office (DMO) also highlight a quarter-on-quarter growth of ₦4.72 trillion, or 3.3%, up from ₦144.67 trillion recorded at the end of December 2024.
This upward trend in Nigeria’s debt stock has been attributed to new borrowing and the depreciation of the naira, which significantly inflated the country’s external debt when converted from foreign currencies.
The sharp rise comes amid continued fiscal challenges. Although government revenues have seen some improvement, reliance on both local and foreign borrowing to bridge budget deficits persists.
External debt rose to ₦70.63 trillion ($45.98 billion) as of March 31, 2025—a substantial jump from ₦56.02 trillion ($42.12 billion) during the same period last year. This translates to an annual increase of ₦14.61 trillion, or 26.1%. On a quarterly scale, the increase was more modest—₦344 billion, or 0.5%—from ₦70.29 trillion at the end of 2024.
While the dollar amount increased by $3.86 billion over the year, the disproportionate rise in naira terms highlights the effects of the weakening exchange rate. For Q1 2024, the Central Bank of Nigeria (CBN) applied an official exchange rate of ₦1,330.26 to the dollar. Although the exact rate for Q1 2025 hasn’t been disclosed, the figures suggest further devaluation of the naira, which has made servicing foreign-denominated debt significantly more expensive.
Nigeria’s external debt portfolio includes funding from multilateral lenders like the World Bank and the African Development Bank, as well as bilateral partners and private investors, including those in the Eurobond market.
With the local currency under pressure, the cost of meeting foreign debt obligations in naira has become steeper. If ongoing monetary reforms fail to stabilise the exchange rate, this burden could intensify.
Meanwhile, domestic debt also followed an upward trajectory, climbing to ₦78.76 trillion ($51.26 billion) by March 2025. This marks a year-on-year rise of ₦13.11 trillion, or 20%, up from ₦65.65 trillion ($49.35 billion) in March 2024. Compared to the previous quarter, domestic debt grew by ₦4.38 trillion, or 5.9%, from ₦74.38 trillion.
Of this total, the Federal Government was responsible for ₦74.89 trillion, while debts owed by the 36 states and the Federal Capital Territory (FCT) amounted to ₦3.87 trillion.
Interestingly, subnational debt levels slightly dipped from ₦3.97 trillion in Q4 2024 and ₦4.07 trillion in Q1 2024. This could indicate more responsible borrowing practices at the state level or improved debt repayment during the period under review.
Domestic borrowing remains heavily reliant on government securities such as Treasury Bills, FGN Bonds, Green Bonds, and Sukuk. These instruments are less vulnerable to currency risk but contribute to Nigeria’s growing interest burden.
By Q1 2025, Nigeria’s debt profile was almost evenly split between domestic and external obligations, with local debt comprising 52.7% and foreign debt 47.3%. This represents a slight deviation from March 2024, when domestic debt accounted for 54% and external debt 46%.
The increasing weight of external debt—especially when assessed in naira—raises concerns over the vulnerability of public finances to currency fluctuations. At the same time, the growth in domestic debt reflects ongoing government efforts to raise funds internally, though it also raises concerns about debt sustainability and the potential crowding out of the private sector.
As total public debt approaches the ₦150 trillion mark, analysts are raising alarms about fiscal sustainability, particularly as debt servicing continues to consume a significant portion of the federal budget.
