By Obinna Uballa
Nigeria’s public debt burden has risen to an unprecedented N152.40 trillion as of June 30, 2025, marking a N3.01 trillion or 2.01% increase from N149.39 trillion recorded at the end of March, according to the latest figures from the Debt Management Office (DMO).
In dollar terms, the debt profile climbed from $97.24 billion to $99.66 billion within the same period, reflecting a 2.49% rise. The DMO attributed part of the increase to currency depreciation, which inflated the naira value of external loans despite limited new borrowings.
External Debt Edges Up to $46.98 Billion
Nigeria’s external debt stock rose marginally to $46.98 billion (N71.85 trillion) in June from $45.98 billion (N70.63 trillion) in March. Multilateral institutions continue to dominate the creditor mix, holding $23.19 billion or 49.4% of total external obligations. The World Bank’s International Development Association (IDA) alone accounts for $18.04 billion, nearly 40% of Nigeria’s foreign loans.
Bilateral lenders hold $6.20 billion, led by the Export-Import Bank of China ($4.91 billion), followed by France, Japan, India, and Germany. Commercial loans remain substantial at $17.32 billion, mostly Eurobonds, which constitute 36.9% of total external borrowings. An additional $268.9 million is owed under syndicated facilities and commercial bank loans.
Analysts warn that Nigeria’s dependence on Eurobonds and other market-driven instruments increases exposure to global interest rate shocks, while the reliance on concessional funding highlights structural weaknesses in domestic revenue generation.
Domestic Debt Dominated by Bonds, Ways and Means
On the domestic front, total debt climbed to N80.55 trillion by June, up N1.79 trillion from N78.76 trillion in March. Long-term Federal Government bonds remained the largest component, accounting for N60.65 trillion or 79.2% of total domestic liabilities.
This included N36.52 trillion in standard FGN bonds, N22.72 trillion in securitised Ways and Means advances from the Central Bank of Nigeria, and N1.40 trillion in dollar-denominated bonds.
Treasury bills stood at B12.76 trillion (16.7%), while Sukuk bonds amounted to N1.29 trillion. Other instruments included savings bonds worth N91.53 billion, green bonds of N62.36 billion, and promissory notes totalling N1.73 trillion.
The steady rise in securitised Ways and Means financing underscores the government’s continued fiscal strain, as borrowing increasingly fills revenue shortfalls to fund budgetary operations.
FG Accounts for 92% of Total Debt
Of the N152.40 trillion total debt, the Federal Government is responsible for N141.08 trillion, about 92.6%. This comprises N64.49 trillion in external obligations and 76.59 trillion in domestic debt.
For the first time this year, the DMO also provided a disaggregated breakdown of subnational debts. State governments and the Federal Capital Territory jointly owe $4.81 billion (N7.36 trillion) externally, while their domestic debts stand at N3.96 trillion, bringing total subnational liabilities to N11.32 trillion or 7.4% of the national figure.
Exchange Rate Weakness Fuelling Debt Expansion
The DMO noted that external debts were converted at N1,529.21 per dollar – the Central Bank’s official rate as of June 30, 2025. This weaker exchange rate compared to earlier in the year significantly inflated the naira value of foreign borrowings, contributing to the apparent jump in total debt.
Experts warn that this trend exposes Nigeria’s debt stock to further expansion if the naira continues to depreciate, even without additional external borrowing.
Debt Sustainability Concerns Persist
While Nigeria’s debt-to-GDP ratio remains within international thresholds, economists say the pace of accumulation and the soaring cost of debt servicing threaten fiscal sustainability.
The DMO emphasised the need for stronger fiscal consolidation measures, particularly in expanding the non-oil tax base and rationalising recurrent expenditure.
Nigeria currently spends over 80% of its revenues on debt service, leaving limited room for infrastructure and social investment. Economists argue that unless structural reforms are implemented to boost productivity and improve tax efficiency, the country’s debt profile could become unsustainable in the medium term.
