Nigeria’s total public debt climbed to N149.39tn as of March 31, 2025, representing an increase of N27.72tn or 22.8 per cent compared to N121.67tn recorded in the same period of 2024.
According to figures released by the Debt Management Office (DMO) on Friday, the debt stock also rose by N4.72tn or 3.3 per cent from N144.67tn as of December 31, 2024.
The continued growth in public debt is largely driven by fresh borrowings from the Federal Government and the depreciation of the naira, which has inflated the local currency value of external obligations.
This surge comes against a backdrop of ongoing fiscal pressures and the government’s continued dependence on both domestic and external financing to bridge budget deficits.
At the end of the first quarter of 2025, Nigeria’s external debt stood at N70.63tn (\$45.98bn), up from N56.02tn (\$42.12bn) in Q1 2024. This reflects a year-on-year increase of N14.61tn or 26.1 per cent. On a quarterly basis, it inched up from N70.29tn in December 2024, marking a marginal rise of N344bn or 0.5 per cent.
While the actual increase in dollar terms over the year was \$3.86bn, the significant depreciation of the naira amplified the growth when reported in local currency.
For context, the Central Bank of Nigeria used an exchange rate of N1,330.26/\$1 to value external debt in Q1 2024. Although the DMO did not disclose the exact exchange rate used for Q1 2025, the higher naira value suggests that a weaker rate was applied, highlighting ongoing currency volatility.
Nigeria’s external debt comprises loans from multilateral institutions like the World Bank and African Development Bank, bilateral lenders, and commercial instruments such as Eurobonds.
The rising cost of debt servicing, fueled by naira depreciation, has sparked concern over its impact on government finances, especially as the country struggles to boost foreign exchange liquidity and stabilise the currency.
Domestically, Nigeria’s debt stock rose to N78.76tn (\$51.26bn) in March 2025, up from N65.65tn (\$49.35bn) a year earlier — an increase of N13.11tn or 20 per cent. Compared to Q4 2024, domestic debt expanded by N4.38tn or 5.9 per cent from N74.38tn.
Of the domestic debt total, the Federal Government held N74.89tn, while state governments and the Federal Capital Territory accounted for N3.87tn.
This marks a slight decline in state-level domestic debt from N3.97tn in the previous quarter and N4.07tn in Q1 2024, suggesting either better debt servicing performance or a slowdown in new borrowings by subnational governments.
Domestic debt largely consists of instruments such as Federal Government Bonds, Treasury Bills, Sukuk, and Green Bonds, which help finance budget deficits but carry interest costs and can reduce private sector credit availability.
As of March 2025, domestic debt made up 52.7 per cent of the total debt portfolio, while external debt accounted for 47.3 per cent. This reflects a shift from March 2024, when domestic debt stood at 54 per cent and external debt at 46 per cent.
The rise in the external share, particularly in naira terms, underscores Nigeria’s heightened exposure to exchange rate risk. Meanwhile, the steady growth in domestic borrowing highlights the government’s greater reliance on the local capital market, despite challenges such as rising interest rates and fluctuating investor demand.
