Nigeria’s Debt Increased by 3.27% in Q1 2025 – NBS
According to recent data from the National Bureau of Statistics (NBS), Nigeria’s total debt—which combines both external and domestic obligations—rose to ₦149.38 in the first quarter of 2025. This represents a 3.27% increase compared to the ₦144.66 trillion recorded in the fourth quarter of 2024. Of this amount, external debt accounted for ₦70.63 trillion, while domestic debt stood at ₦78.75 trillion. The figures indicate that domestic debt made up 52.72% of the total debt portfolio, while external debt contributed 47.28%, underscoring the government’s growing reliance on local borrowing to meet fiscal obligations.
A closer look at state-level data reveals significant disparities in borrowing patterns across the federation. Lagos State remains the most indebted, with a domestic debt profile of ₦874.03 billion, reflecting its large economy and infrastructure-driven expenditure. Rivers State follows with ₦364.39 billion in domestic debt, highlighting its dependence on borrowing to fund developmental projects. In contrast, Jigawa State recorded the lowest domestic debt at ₦1.06 billion, while Ondo State followed closely with ₦11.76 billion, showing more conservative borrowing practices.
The rise in the overall debt stock has been attributed largely to the depreciation of the Naira, which increased the valuation of external loans when converted to local currency. Additionally, new borrowings by the federal government to finance budget deficits and support public expenditure further contributed to the upward trend. As debt servicing obligations grow, they continue to exert pressure on public finances, limiting the fiscal space available for essential investments in infrastructure, healthcare, and education. The situation also poses challenges to Nigeria’s broader economic stability, particularly as the government intensifies efforts to stabilise the Naira and improve foreign exchange liquidity.
While greater dependence on domestic borrowing may help cushion Nigeria from external shocks and foreign exchange risks, it comes with its own set of challenges. Excessive domestic borrowing can crowd out private sector investment, driving up interest rates and reducing access to affordable credit for businesses. This dynamic could potentially slow economic growth and weaken industrial productivity. Hence, it is crucial for the government to strengthen its debt management frameworks, ensuring that borrowing remains sustainable and well-coordinated across all tiers of government.
Moving forward, Nigeria’s borrowing strategy should prioritise productive and revenue-generating ventures, particularly in key sectors such as energy, agriculture, and manufacturing. Directing loans toward projects that stimulate growth and create employment will not only enhance the country’s repayment capacity but also reduce the long-term risks associated with mounting public debt. Sustainable debt management, fiscal discipline, and transparent use of borrowed funds remain essential to securing Nigeria’s economic future. (Source: National Bureau of Statistics)
