Nigeria’s Debt Rises to ₦159.28tn Amid Increased Domestic Borrowing
Nigeria’s Debt Profile Expands to ₦159.28 Trillion in 2025
Nigeria’s total public debt increased to ₦159.28 trillion as of December 31, 2025, according to data released by the Debt Management Office (DMO), reflecting sustained borrowing pressures driven largely by domestic financing. The figure represents both quarterly and annual growth in the country’s debt profile amid ongoing fiscal challenges.
Debt Growth Driven by Domestic Borrowing
The latest data shows that public debt rose from ₦153.29 trillion in September 2025 to ₦159.28 trillion in December 2025, marking a quarter-on-quarter increase of ₦5.98 trillion or 3.9%.
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Domestic debt remained the dominant component, accounting for 53.27% of total public debt. It rose to ₦84.85 trillion in December 2025 from ₦81.82 trillion in September 2025, reflecting continued reliance on the local debt market.
The Federal Government accounted for the majority of domestic obligations at ₦80.49 trillion, while states and the Federal Capital Territory held ₦4.36 trillion.
External Debt Shows Moderate Increase
Nigeria’s external debt stood at ₦74.43 trillion as of December 2025, representing 46.73% of the total debt stock.
This reflects a quarterly increase of ₦2.95 trillion from ₦71.48 trillion in September 2025, alongside a year-on-year rise of ₦4.14 trillion from ₦70.29 trillion in December 2024.
In dollar terms, total public debt rose from $103.94 billion in September 2025 to $110.97 billion by year-end, highlighting the combined effects of new borrowings and exchange rate dynamics.
Fiscal Pressures and Debt Sustainability Concerns
The steady increase in Nigeria’s debt profile underscores ongoing fiscal pressures, including revenue constraints and the need to finance budget deficits. Rising debt servicing obligations continue to limit fiscal space for capital expenditure and social investments.
Recent fiscal projections indicate that debt servicing remains a significant component of government expenditure, reinforcing concerns about long-term sustainability and the efficiency of borrowing strategies.
Implications for Economic Policy
The dominance of domestic borrowing suggests a strategic shift towards reducing exposure to external shocks, including exchange rate volatility. However, it also raises concerns about crowding out private sector credit and increasing domestic interest rate pressures.
Analysts note that while borrowing remains necessary to fund infrastructure and development, improving revenue generation will be critical to maintaining fiscal balance. The DMO has consistently emphasised the importance of aligning borrowing with productive investments to ensure economic returns.
Nigeria’s public debt reaching ₦159.28 trillion highlights the scale of the country’s fiscal challenges and the continued reliance on borrowing to support government spending. While domestic financing has provided a buffer against external risks, sustaining debt at manageable levels will depend on stronger revenue mobilisation, disciplined fiscal management, and effective deployment of borrowed funds into growth-enhancing sectors.
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