Nigeria’s total public debt has climbed to ₦144.67 trillion ($94.23 billion) as of December 31, 2024, marking a steep 48.58% increase from the ₦97.34 trillion ($108.23 billion) recorded a year earlier, according to the latest data released by the Debt Management Office (DMO).
The DMO’s report highlights that this rise represents a ₦47.32 trillion jump in just one year, driven by increased borrowing both domestically and externally, as well as the weakening of the naira which inflated the value of Nigeria’s dollar-denominated debt.
Domestic vs. External Debt
External debt surged by 83.89%, climbing from ₦38.22 trillion ($42.50 billion) in December 2023 to ₦70.29 trillion ($45.78 billion) by the end of 2024. This dramatic rise is largely due to fresh foreign loans and the depreciation of the naira, which raised the local currency cost of servicing foreign debt.
Domestic debt also grew but at a slower pace—25.77%, increasing from ₦59.12 trillion ($65.73 billion) to ₦74.38 trillion ($48.44 billion). The Federal Government was responsible for the bulk of this, with its domestic debt rising by 32.19% to ₦70.41 trillion, signaling continued reliance on local borrowing to plug budget deficits and fund development projects.
Interestingly, debt held by state governments and the Federal Capital Territory (FCT) dropped from ₦5.86 trillion to ₦3.97 trillion, a 32.27% decline. This suggests a more cautious approach to borrowing at the subnational level.
Quarterly Overview
Compared to Q3 2024, total public debt rose by 1.65% or ₦2.35 trillion. External debt grew by ₦1.4 trillion in the final quarter, while domestic debt rose by about 1.29%, mainly reflecting Federal Government borrowing. Meanwhile, debt held by state governments and the FCT decreased by 5.69% over the same period.
Debt Composition and Implications
As of the end of 2024, external debt made up 48.59% of Nigeria’s total debt, while domestic debt accounted for 51.41%—a relatively even split. However, the continued increase in external borrowing raises red flags about Nigeria’s growing exposure to global economic volatility and currency risk.
The Federal Government held the lion’s share of both external and domestic debt, while state governments and the FCT contributed a smaller portion.
Mounting Concerns
Economists and financial experts have raised concerns over Nigeria’s ballooning debt profile. The rapid accumulation, especially in foreign-denominated debt, exposes the country to exchange rate risks and higher debt servicing costs, especially with the naira currently under pressure.
Analysts warn that unless revenue generation improves significantly—through diversification, better tax collection, and stronger economic fundamentals—Nigeria risks placing future budgets under unsustainable debt burdens.
While borrowing is often necessary for development, experts stress that prudent debt management must accompany such moves. Without a clear repayment strategy and efforts to grow the economy, the rising debt could undermine long-term fiscal stability.
