The Federal Government has ramped up its domestic borrowing to ₦10.85 trillion in the first four months of 2025, even as economists warn of rising public debt and its toll on the nation’s finances.
Data shows that Nigeria’s overall public debt surged by nearly 49% year-on-year, hitting ₦144.66 trillion in 2024, up from ₦97.34 trillion a year earlier. The government alone accounts for the vast majority, with ₦137.28 trillion attributed to its obligations.
This sharp rise in debt has led to soaring costs, with the FG spending 150% of its total revenue in 2024 just to service its debts — more than double the 65% reported the previous year. According to the Debt Management Office (DMO), domestic debt servicing costs grew 12% to ₦5.9 trillion, while payments on external loans rose by a third to $4.7 billion.
The country’s debt-to-GDP ratio, a key measure of fiscal sustainability, worsened to 52.9% in 2024, up from 48.7% the year before. This trend has sparked concerns that Nigeria’s ability to manage its debt without external help may be slipping.
Despite these pressures, official figures show that the government has leaned heavily on local borrowing between January and April this year. Domestic borrowing rose slightly by 0.7% compared to the same period in 2024, driven mainly by a shift towards Treasury Bills (TBs) and savings bonds.
Specifically, borrowing through TBs jumped by 8.3%, reaching ₦8.38 trillion. After a strong start in January, TB borrowing climbed 26% in February and saw further increases in March before dipping in April. At the same time, funds raised through the government’s savings bonds soared by nearly 50% year-on-year to ₦17.29 billion.
Investor confidence remains strong, with public demand for government bonds far outpacing supply. Over four months, while the DMO offered ₦1.45 trillion in bonds, subscriptions totaled ₦3.33 trillion. February saw particularly high interest, as bids exceeded the offer by over four times.
However, the International Monetary Fund (IMF) has flagged Nigeria’s rising debt as a point of concern. In its April 2025 Fiscal Monitor, the IMF recommended that countries like Nigeria curb borrowing and improve spending efficiency to shield their economies from global shocks. Though the IMF forecasts a modest decline in Nigeria’s debt-to-GDP ratio this year, it expects the fiscal deficit to widen further.
As the government continues to rely on local markets for funding, experts remain divided on how this strategy will impact the nation’s economic stability in the long run.
