Nigeria’s fiscal outlook remains under severe pressure despite what appears to be a gradual improvement in some key debt indicators, the Nigerian Economic Summit Group (NESG) has warned in its latest Debt Burden Monitor for 2025.
The report revealed that although Nigeria’s Debt Burden Index (DBI) declined from a record 83.6 points in 2023 to 70.9 points in 2024, the reduction does not reflect a genuine strengthening of the country’s fiscal position, but rather a temporary moderation in debt servicing pressures.
According to the NESG, the seeming improvement masks deeper structural weaknesses, including weak government revenue, rising borrowing dependence, and persistent fiscal imbalances that continue to threaten debt sustainability.
The report noted that Nigeria’s public debt-to-GDP ratio climbed sharply to 40.6 per cent in 2024, underscoring the Federal Government’s continued reliance on borrowing to finance budget deficits amid revenue challenges.
It stressed that the divergence between the debt stock and actual fiscal stress presents a troubling reality for the economy.
“The 2024–2025 transition does not yet reflect a decisive shift toward debt sustainability. Rather, it signals a system making only marginal adjustments, with improvements in headline ratios masking persistent structural imbalances,” the report stated.
NESG further warned that debt pressures are expected to remain elevated throughout 2025, with quarterly projections showing the DBI rising to 78.4 points in the first quarter and peaking at 79.6 points in the second quarter before slightly moderating to 76.2 points in the third quarter and closing the year at 79.2 points.
The organisation explained that the continued fluctuation of the DBI within the high-risk range of 76 to 80 points indicates that Nigeria has not achieved any meaningful structural easing in its debt burden.
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It identified the debt service-to-revenue ratio as the dominant source of fiscal strain, noting that liquidity pressure remains one of the country’s most critical economic vulnerabilities.
The NESG also cautioned against relying solely on debt-to-GDP figures to assess Nigeria’s fiscal health, arguing that improvements in such conventional indicators may largely reflect valuation effects rather than genuine fiscal strengthening.
“Stock versus stress disconnect remains a major concern. Improvements in debt ratios do not necessarily translate into reduced fiscal pressure,” the report added.
The group called for stronger fiscal reforms, improved revenue mobilisation, and a more sustainable borrowing strategy to prevent the country’s debt situation from worsening further.
NESG described the Debt Burden Index as a more comprehensive tool for measuring fiscal stress because it captures the broader realities of debt sustainability beyond conventional debt stock metrics.
The report drew data from the National Bureau of Statistics (NBS), Central Bank of Nigeria (CBN), Debt Management Office (DMO), and the Budget Office of the Federation.
Esther Ososanya is an investigative journalist with Pinnacle Daily, reporting across health, business, environment, metro, Fct and crime. Known for her bold, empathetic storytelling, she uncovers hidden truths, challenges broken systems, and gives voice to overlooked Nigerians. Her work drives national conversations and demands accountability one powerful story at a time.