Nigeria’s total public debt could surge to ₦160.6 trillion by the end of 2025, as the Federal Government intensifies borrowing to bridge widening fiscal gaps, according to a new report by CSL Stockbrokers Limited, a subsidiary of FCMB Group Plc.
The firm’s H2 2025 Economic Outlook warns of mounting fiscal pressures, projecting that the government may borrow an additional ₦9.3 trillion or more in the second half of the year. This would push the public debt to around 50.2% of the pre-rebased Gross Domestic Product (GDP).
“We expect the government to ramp up its borrowing efforts in the second half of the year to bridge the widening fiscal gap,” the report stated.
Worsening Revenue Woes Deepen Deficit
The projection highlights concerns over Nigeria’s fragile fiscal trajectory, exacerbated by underperforming oil revenue and stalled tax reform efforts. While the 2025 budget anticipated a fiscal deficit of 3.9% of GDP, CSL now forecasts the gap could widen to 5.8%.
Nigeria has failed to meet its 2025 oil production target of 2.06 million barrels per day. From January to May, production averaged just 1.67 million barrels per day, with oil prices hovering around $70.82 per barrel — below the government’s benchmark of $75. This has significantly undermined expected revenue from oil, which remains the country’s largest income source.
Non-oil revenues have also fallen short. A proposed VAT hike from 7.5% to 10% has been delayed amid opposition from lawmakers, and the implementation of new tax laws has been pushed to 2026. These setbacks have hindered efforts to boost domestic revenue collection.
NNPC’s Limited Remittance, External Borrowing Plans
The report also raises red flags about the Nigerian National Petroleum Company Limited’s (NNPC) remittance practices. CSL notes that NNPC is currently paying only about half of the savings from fuel subsidy removal into the Federation Account, further straining government finances.
To fund the growing deficit, the government is expected to increase borrowing from both domestic and international markets. CSL referenced a recently submitted $25 billion medium-term borrowing plan, which includes plans for foreign-currency-denominated domestic debt.
There is also speculation that Nigeria could return to the Eurobond market in November to refinance maturing debt obligations.
Debt Metrics and Sustainability Concerns
Despite the projected rise in borrowing, Nigeria’s debt-to-GDP ratio may appear to drop slightly to 50.7% by year-end due to the anticipated GDP rebasing. However, CSL warns that this is a statistical adjustment that does little to address underlying debt sustainability risks.
Rising Debt in Context
As of March 31, 2025, Nigeria’s total public debt stood at ₦149.39 trillion — a year-on-year increase of ₦27.72 trillion (22.8%) from ₦121.67 trillion in Q1 2024, according to the Debt Management Office (DMO). It also rose by ₦4.72 trillion or 3.3% from ₦144.67 trillion at the end of December 2024.
The consistent rise in debt is driven by new borrowings to finance budget deficits and the depreciation of the naira, which has increased the naira value of the country’s foreign-denominated debts.
As Nigeria continues to grapple with limited revenue and heavy dependence on borrowing, concerns persist over the long-term sustainability of its fiscal framework and the capacity to manage future debt obligations effectively.
