Why Nigeria’s Public Debt Jumped to N159.28tn in One Year

Nigeria’s total public debt reached N159.28 trillion as of December 31, 2025, according to new data released by the Debt Management Office on Tuesday.

The figure marks the most significant expansion in the country’s debt profile in recent memory, and the breakdown tells a story of a government leaning ever more heavily on its own domestic capital market to finance spending.

N159.28tn : Total debt Dec 2025$110.97bn

+10.1% : Year-on-year growth + N14.61tn vs Dec 2024

+3.9%: Quarter-on-quarter+N5.98tn vs Sep 2025

The numbers in full: how fast did debt grow?

In the twelve months between December 2024 and December 2025, Nigeria’s public debt rose from N144.67 trillion to N159.28 trillion, a year-on-year increase of N14.61 trillion, or 10.1%.

Measured in dollars, the debt stock jumped from $94.23 billion to $110.97 billion, a $16.75 billion increase driven partly by both new borrowing and changes in the naira-to-dollar exchange rate used for conversion.

Over a shorter timeframe, the quarter-on-quarter increase between September and December 2025 was N5.98 trillion, or 3.9%, suggesting debt accumulation continues at a consistent pace each quarter.

Domestic borrowing is where most of the growth is coming from

The most important structural story inside these figures is the dominance of domestic debt. As of December 2025, domestic borrowing accounted for 53.27% of Nigeria’s total public debt, and it is growing faster than the external side.

Domestic debt rose from N74.38 trillion in December 2024 to N84.85 trillion in December 2025, a year-on-year increase of N10.47 trillion, or 14.1%.

In dollar terms, that is a climb from $48.44 billion to $59.12 billion. The Federal Government alone accounts for N80.49 trillion of that figure, representing 50.53% of total public debt. States and the FCT together account for N4.36 trillion.

“When the government competes for funds in the local capital market, it can push up the cost of credit for private sector borrowers, a knock-on effect that touches businesses and consumers alike.”

External debt rose too, but at a slower pace

Nigeria’s external debt stood at N74.43 trillion as of December 2025, making up 46.73% of total public debt. In dollar terms, this amounts to $51.86 billion, up from $45.78 billion in December 2024 — a year-on-year increase of approximately $6.08 billion.

On a quarterly basis, external debt rose by N2.95 trillion from N71.48 trillion in September 2025. The Federal Government held the bulk of external obligations at N66.27 trillion, while states and the FCT accounted for N8.16 trillion.

The comparatively slower growth in external debt partly reflects the government’s deliberate tilt toward domestic instruments, though naira depreciation means that the naira-equivalent value of external loans can rise even when dollar amounts grow modestly.

What the exchange rate has to do with it

The DMO noted that December 2025 figures were converted using the CBN’s official exchange rate of N1,435.2571 to the dollar, while September 2025 figures used a rate of N1,474.85.

The slight naira appreciation between the two periods means the dollar value of the debt stock grew less than the naira value might suggest, and comparisons across periods must account for this.

Why fiscal experts are watching this closely

Nigeria’s debt pile is not unusual in isolation,many emerging economies carry comparable debt-to-GDP ratios. What concerns analysts is the revenue side of the equation.

Nigeria’s debt service-to-revenue ratio has remained elevated, meaning a growing share of government income goes toward servicing existing obligations rather than funding infrastructure, education, or healthcare.

Finance Minister Wale Edun has urged institutions like the IMF and World Bank to reduce borrowing costs for developing economies, a signal that the cost burden of external debt is a live concern within government.

Meanwhile, structural reforms, including the removal of the fuel subsidy and the liberalisation of the exchange rate, were partly aimed at creating fiscal headroom, though their full effect on the debt trajectory is still unfolding.

The December 2025 data are described as provisional by the DMO and will be watched closely by investors, ratings agencies, and policymakers as they assess the medium-term direction of Nigeria’s public finances.

Frequently asked questions

What is Nigeria’s total public debt as of December 2025?

Nigeria’s total public debt stood at N159.28 trillion as of December 31, 2025, according to the Debt Management Office. In dollar terms, this is approximately $110.97 billion, converted at the CBN’s official rate of N1,435.2571 per dollar.

How much did Nigeria’s debt increase in one year?

Nigeria’s public debt increased by N14.61 trillion, or 10.1%, between December 2024 and December 2025. In dollar terms, the increase was $16.75 billion — from $94.23 billion to $110.97 billion.

What is driving the rise in Nigeria’s public debt?

Domestic borrowing is the primary driver. It grew 14.1% year-on-year and accounted for 53.27% of total debt by December 2025, reflecting heavy reliance on Nigeria’s local capital market to close the fiscal gap between government revenue and spending obligations.

How much of Nigeria’s debt is external?

External debt stood at N74.43 trillion as of December 2025, representing 46.73% of total public debt, or approximately $51.86 billion. The Federal Government holds N66.27 trillion of that figure.

Is Nigeria’s public debt sustainable?

Debt sustainability remains an active concern. Nigeria’s low revenue base and high debt service-to-revenue ratio mean that a growing debt stock poses real fiscal risk, even if the debt-to-GDP ratio is within ranges seen in comparable economies. The DMO data will continue to be closely watched by rating agencies and multilateral lenders.

Who publishes Nigeria’s public debt data?

The Debt Management Office (DMO) is responsible for managing and publishing Nigeria’s public debt statistics. The December 2025 figures were released in April 2026 and are described as provisional pending final reconciliation.