By Patrick Wemambu
Variously described as ludicrous, escalating and unsustainable, Nigeria’s absurd debt profile has sparked intense debates among economists, policymakers and the citizenry. Rising exponentially in the past decade, the giant of Africa’s public debt reached N144.67trn (some $94.23bn) by the end of 2024 – representing a substantial increase from N10.16trn in 2014.
Standing approximately at ₦149.39 trillion ($97 billion) as of March 2025, with domestic debt accounting for 52.7% and external debt making up 47.3% – the debt-to-GDP ratio rose to around 55%, exceeding the Debt Management Office’s (DMO) self-imposed ceiling of 40%.
Walking down the memory boulevard recently, a popular news agency reported that in just two years, Nigeria has accumulated an alarming number of borrowings. From $750 million in June 2023, the profile ballooned to $800 million in July 2023 – with $7.4 billion plus €100 million accruing as at December 2023.
Likewise, a total of $6.45 billion was obtained from the World Bank by September 2024 and another $2.209 billion in December 2024.
Only last Tuesday, the Senate approved President Bola Ahmed Tinubu’s 2025–2026 external borrowing plan, which includes loans of $21.8 billion, €2.1 billion, and ¥15 billion, along with a €65 million grant, to fund key projects and programmes across multiple sectors of the economy.
Similarly, the red chamber gave approval for the issuance of a ₦757.98 billion Federal Government bond in the domestic market to offset outstanding pension liabilities under the Contributory Pension Scheme (CPS).
In addition, President Tinubu’s request was approved to raise up to $2 billion in the domestic market through a Foreign Currency-Denominated Instrument Local Issuance Programme.
Accordingly in deference to extant rules, the approvals followed the recommendations of the Senate Committee on Local and Foreign Debts, chaired by Senator Aliyu Wamakko.
Notwithstanding the approvals, debate on the floor was tense. Some lawmakers expressed strong reservations about the sustainability of Nigeria’s mounting debt load.
Senator Abdul Ningi was among those who opposed the motion, warning: “Generations after us will continue to pay these loans. I’ve gone through the documents and cannot find a clear repayment plan.”
However, other senators, including Adetokunbo Abiru and Finance Committee Chairman Sani Musa, defended the proposals, describing the loan terms as flexible and growth-oriented.
Ostensibly, this initiative is geared towards investing strategically to stimulate jobs, growth, and foreign exchange inflows.
A significant portion of the domestic bond — ₦757.98 billion — is earmarked for the settlement of longstanding pension arrears. The move is expected to bring relief to thousands of retirees still awaiting full payment of their entitlements.
Happily enough, the DMO is expected to float the bond locally, reducing exposure to external risk.
Juxtaposed against the backdrop of the national public debt projected to exceed N160trn by December 2025, however, the recent external borrowing plans raise grave concerns about sovereign default risks. Unbelievably, debt servicing is said to now consume more than 90% of federal revenue, prompting sharp criticisms from pundits. Little wonder, the ugly scenario has been dubbed mortgaging Nigeria’s future for its present.
Factors contributing to the rising debt profile include the aggressive borrowings, Naira volatility, low revenue mobilisation and escalating debt servicing costs.
Moving forward, experts have recommended expanding the revenue generation base, rationalizing government expenditure and improving fiscal discipline to mitigate associated risks.
