Nigeria's Public Debt Surges Amid FX Volatility and Reforms

Nigeria's public debt increased significantly to ₦49.8 trillion in March 2023, with projections suggesting it could reach ₦159.2 trillion by December 2025, representing a 200% increase. This rise is attributed to the formal recognition of previously unrecorded obligations rather than new borrowing.

The report identifies two main factors for this spike: the recognition of ₦30 trillion in securities and the impact of the naira's sharp depreciation, which inflated the local currency value of external debt. The Debt Management Office (DMO) stated that Nigeria's debt-to-GDP ratio stood at 36.1% in 2025, below the global average of 92%.

Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, responded to the report, asserting that debt sustainability should be assessed within a global framework rather than relying solely on nominal debt levels. The report highlights the challenges of servicing debt amid rising interest rates and weak government revenue.