Nigeria’s total public debt stood at approximately ₦159.28 trillion (about $111 billion) as of 31 December 2025, according to the Debt Management Office (DMO).
This marked a rise from ₦153.29 trillion at end-September 2025 and ₦144.67 trillion a year earlier. Domestic debt accounts for roughly 53% (₦84.85 trillion), external debt about 47% (₦74.43 trillion or $51.86 billion). Federal Government obligations dominate both categories.
Debt-to-GDP remains moderate by international standards—projected in the low-to-mid 30% range for 2026 by the IMF—well below common high-risk thresholds. The sharper concern is the **debt-service-to-revenue ratio.
The 2026 budget allocates around ₦15.8 trillion to debt servicing, consuming a very large share (approaching half in some projections) of expected federal revenue. This crowds out capital and social spending.
How can this debt be paid (or managed)?
Sovereign debt is rarely “paid off” in full like a household mortgage. It is rolled over, refinanced, and gradually reduced relative to the size of the economy through a combination of:
– Stronger revenue mobilisation: Higher tax collections (non-oil revenue has been a focus of recent reforms), better oil and gas receipts, and improved remittances from state-owned enterprises. Early 2026 tax revenue figures have shown some improvement.
– Faster, broader economic growth: Real GDP expansion that outpaces the rise in debt stock. Reforms that improve the business climate, power supply, logistics, and security can raise the denominator (GDP) faster than the numerator (debt).
– Fiscal discipline: Narrowing the primary deficit so that new borrowing is limited to productive capital projects rather than recurrent spending or pure refinancing. The government has signalled tighter budget implementation.
– Refinancing and liability management: Replacing expensive short-term or high-interest debt with longer-tenor or cheaper instruments, and continuing to manage the large stock of previously securitised Ways and Means advances.
– External support and possible restructuring: Multilateral financing on concessional terms, and in extreme scenarios, negotiated relief—though Nigeria is not currently in a classic debt-trap position relative to GDP.
Naira devaluation after the 2023–2024 foreign-exchange reforms significantly inflated the naira value of the external stock. Part of the headline increase therefore reflects currency translation rather than purely new cash borrowings. Officials have repeatedly noted this distinction.
Who is going to pay?
Nigerians will pay—primarily current and future taxpayers and citizens.
Debt service is met from the federal purse, which is funded by taxes (personal income tax, company income tax, VAT, customs, etc.), oil revenues, and other non-oil sources. When debt service absorbs a large share of revenue, the practical consequences are:
– Higher taxes or broader tax net over time,
– Lower public investment in roads, hospitals, schools, and security,
– Pressure on the naira and inflation if monetisation or heavy domestic borrowing continues,
– Intergenerational transfer—tomorrow’s workers inherit both the stock and the service burden.
State governments and the FCT also carry a portion of the debt and service it from their own allocations and internally generated revenue, so the burden is shared across the federation.
Political context and the questions directed at Tinubu’s supporters
Supporters of the current administration typically argue that:
– A large part of the rise reflects inherited obligations, the naira impact of necessary FX unification, and the securitisation of past Ways and Means advances.
– Borrowing has financed critical reforms and infrastructure that should eventually raise growth and revenue.
– Debt-to-GDP has stabilised or improved relative to earlier peaks, and revenue performance is beginning to respond to tax reforms.
Experts counter that the absolute stock and especially the service burden remain too high, that fiscal deficits persist, and that ordinary Nigerians feel the cost through higher living expenses and constrained public services long before any growth dividend materialises.
Both perspectives contain elements of truth. The debt is manageable on paper if growth accelerates and revenue rises sustainably.
It becomes problematic if deficits remain large, debt service continues to crowd out development spending, and reforms fail to deliver broad-based growth.
The decisive variables over the next few years will be the trajectory of non-oil revenue, the quality of public expenditure, and whether real GDP growth consistently exceeds the real interest rate on the debt stock.
In short: the ₦159 trillion is a national obligation, not a partisan one. It will be serviced and gradually stabilised—or allowed to become more burdensome—by the collective fiscal performance of the Nigerian state and economy.
Citizens ultimately underwrite it through taxes, inflation, or forgone public goods.
The masses out there will repay it.
Pamela O.
Political Analyst and Columnist
