Despite growing concerns over Nigeria’s escalating public debt and its crippling effect on the economy, the Federal Government increased domestic borrowing to N10.85 trillion in the first four months of 2025, new data reveals.
The country’s total public debt surged by 48.6 per cent to N144.66 trillion in 2024 from N97.34 trillion in 2023, with the Federal Government responsible for 95 per cent (N137.28 trillion) of this amount. The alarming rise has pushed debt servicing costs to 150 per cent of total government revenue in 2024, a sharp jump from 65 per cent in 2023.
According to the Debt Management Office, domestic debt servicing costs rose by 12 per cent year-on-year to N5.9 trillion in 2024, while external debt servicing costs climbed by 33 per cent to $4.7 billion from $3.5 billion in 2023. This has worsened Nigeria’s Debt-to-GDP ratio, which increased to 52.9 per cent in 2024 from 48.7 per cent in 2023—a key indicator of the nation’s ability to sustain its debt without external assistance.
Data from the DMO and Central Bank of Nigeria shows that the Federal Government borrowed N10.85 trillion from domestic investors between January and April 2025, a slight 0.7 per cent increase from N10.767 trillion in the same period last year.
The rise was driven by increased borrowing through Treasury Bills and Federal Government Savings Bonds, which offset a decline in FGN Bond issuances.
– Treasury Bills: FG borrowing through TBs rose by 8.3 per cent to N8.377 trillion in 4M’25 from N7.74 trillion in 4M’24.
– January: N1.872 trillion
– February: N2.36 trillion (26% MoM increase)
– March: N2.61 trillion (11% MoM increase)
– April: N1.537 trillion (41% MoM decline)
– Savings Bonds: Borrowing via Savings Bonds surged by 49.5 per cent to N17.29 billion in 4M’25 from N11.56 billion in 4M’24.
– January: N4.313 billion
– February: N4.18 billion (3.2% MoM decline)
– March: N4.46 billion (6.8% MoM increase)
– April: N4.34 billion (2.7% MoM decline)
Despite rising debt concerns, investors continue to show strong demand for government securities. Total bond offerings by the DMO in the first four months of 2025 stood at N1.45 trillion, while subscriptions reached N3.33 trillion—indicating significant oversubscription.
– January: N450 billion offered, N670 billion subscribed, N601 billion allotted
– February: N350 billion offered, N1.63 trillion subscribed, N910.39 billion allotted
– March: N350 billion offered, N530.31 billion subscribed, N423.68 billion allotted
– April: N350 billion offered, N495.95 billion subscribed, N520.9 billion allotted
The Federal Government’s borrowing spree contradicts warnings from the International Monetary Fund, which has urged nations to reduce debt levels amid global economic uncertainties.
In its Fiscal Monitor April 2025 report, the IMF projected that global public debt would rise by 2.8 percentage points this year, pushing debt levels above 95 per cent of global GDP. The IMF advised:
“Fiscal policy should prioritize reducing public debt and establishing and widening buffers to address spending pressures and economic shocks.”
For Nigeria, the IMF projected a slight decline in the Debt-to-GDP ratio to 52.5 per cent in 2025 from 52.9 per cent in 2024. However, it warned that Nigeria’s fiscal deficit-to-GDP ratio would worsen to 4.5 per cent this year from 3.4 per cent in 2024.
Davide Furceri, Deputy Division Chief of the IMF’s Development Macroeconomic Division, emphasized, “It’s important to create additional fiscal space. In Nigeria’s case, that means focusing on two things: first, boosting revenue through improved mobilization efforts, and second, scaling up spending in key areas like social protection and investment. We understand that many countries, including Nigeria, face pressing spending needs. But spending must be done wisely. This means stronger prioritization and greater efficiency in how resources are allocated.”
According to Vanguard, financial experts offered divergent perspectives on Nigeria’s debt trajectory:
Tunde Abidye (FBNQuest Merchant Bank): “The ratio uses GDP as a denominator. As such, it simply reflects the expected growth in nominal GDP. If GDP expands, the ratio will be smaller.”
Nnamdi Nwizu (Comercio Partners): “Though we have seen an uptick in borrowing, the government is aggressively trying to increase revenue and local activities, which will invariably drive GDP growth.”
Prof. Uche Uwaleke (ACMAN): “The projection of a decline in debt-to-GDP ratio may be linked to ongoing efforts to rebase Nigeria’s GDP. The outcome will likely result in a higher GDP figure, translating to a lower debt-to-GDP ratio.”
David Adonri (Highcap Securities): “Notwithstanding the headroom for debt in relation to GDP, the stress on the FG comes from the overwhelming debt service ratio, which consumes public revenue. With declining crude oil prices, refusal to run a balanced budget will lead to financial embarrassment.”
Analysts noted that the government’s preference for Treasury Bills over long-term bonds could help reduce future debt servicing costs.
Mallam Garba Kurfi (APT Securities): “Borrowing through Bonds has reduced because of high interest rates, while TBs are short-term and rates may drop soon.”
Ayokunle Olubunmi (Agusto & Co): “The anticipated decline in interest rates prompted the focus on short-dated securities like Treasury Bills. Investors are also capitalizing on high yields.”
While the government aims to leverage GDP growth to manage debt ratios, analysts warn that unchecked borrowing and high debt servicing costs could push Nigeria into deeper fiscal distress unless urgent revenue-boosting measures are implemented.