Nigeria’s public debt rose by ₦900 billion in the third quarter of 2025, bringing the total debt to ₦153.29 trillion (around US$103.94 billion) as of September 30, 2025, according to the Debt Management Office (DMO).
The updated figures, released by the DMO on Friday, show a steady increase in government borrowings. This is driven by domestic and foreign financing. The latest increase marks a 0.59 percent rise from the previous quarter’s total of ₦152.39 trillion recorded on June 30, 2025.
The DMO reports that domestic debt now makes up the majority of the total public debt, standing at about ₦81.82 trillion, or 53.37 percent of the total. External debt accounts for the remaining ₦71.48 trillion, which is roughly 46.63 percent of the total.
“The bulk of domestic borrowings continues to come from Federal Government of Nigeria (FGN) bonds and Treasury Bills,” the DMO stated, noting that government securities are the main tools Nigeria uses for local financing.
Within the domestic category, FGN bonds alone represent about 80 percent of the debt stock, highlighting the government’s strong dependence on long-term instruments to meet its funding needs.
Federal Government Still Majority Holder
A further look at the DMO data shows that the Federal Government holds the largest share of the debt, with obligations around ₦77.81 trillion. In comparison, the combined domestic debt of Nigeria’s 36 states and the Federal Capital Territory (FCT) amounts to around ₦4.00 trillion.
DMO Director-General Patience Oniha commented on the data release, saying, “The public debt profile reflects Nigeria’s financing choices across both domestic and international markets. These figures are essential for policymakers, investors, and analysts as we face macroeconomic challenges.”
Context: Funding Gaps and Budget Pressures
Economists point out that rising debt levels coincide with ongoing budget shortfalls and revenue issues for the federal government. Nigeria’s 2026 budget predicts a deficit of about ₦23.85 trillion, or about 4.28 percent of gross domestic product (GDP). This has led to a greater dependence on borrowing for infrastructure and public services.
Analysts believe that ongoing naira volatility and inflationary pressures worsen the debt burden by increasing the local-currency value of external obligations. This is a trend seen over several reporting periods.
Policy Debate and Sustainability Concerns
The growth in public debt has sparked renewed debate among policymakers and civil society regarding debt sustainability and fiscal discipline. Critics argue that without focused efforts to increase domestic revenue, servicing the debt could limit funding for other essential expenditures in future budgets.
In a recent speech, Speaker of the House of Representatives Abbas Tajudeen warned that Nigeria’s public debt trajectory “approaches statutory limits.” He said it called for a reevaluation of borrowing practices to protect fiscal stability.
Meanwhile, Finance Minister Wale Edun has recognized the wider challenge many developing economies face.
At a policy forum, he stated that “rising debt service burdens are a significant concern for many low-income and emerging market countries,” stressing the need for concrete revenue and spending reforms.
SOURCE: businesselitesafrica.com