In a summarized perspective, Nigeria’s rising public debt has become one of the country’s most significant fiscal challenges. While the country’s debt-to-GDP ratio remains within internationally acceptable levels, the government’s limited revenue base has resulted in a disproportionately high debt service burden. More than half of federal government revenue is devoted to servicing debt, leaving limited resources for infrastructure development, healthcare, education, security, and other critical public services.
This policy brief examines Nigeria’s current debt profile, the mechanisms through which debt is serviced, the implications for the economy and citizens, and policy measures that can strengthen fiscal sustainability.
Nigeria’s Current Public Debt Profile: Nigeria’s total public debt, including obligations of the Federal Government, the 36 states and the Federal Capital Territory (FCT), is estimated at approximately ₦159.28 trillion (about US$111 billion).
The debt portfolio consists of:
Although the debt stock continues to grow, international institutions generally consider Nigeria’s debt-to-GDP ratio to be moderate. However, the country’s primary challenge is not excessive borrowing relative to economic output, but insufficient government revenue, to comfortably meet debt obligations.
How Nigeria Services Its Public Debt: Nigeria services its debt through a structured repayment framework, coordinated by the Debt Management Office (DMO) in collaboration with the Central Bank of Nigeria (CBN). Debt repayments are made continuously throughout the year, rather than through a single annual payment.
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