Nigeria’s Debt Stock Jumps 82.4% in 3 Years

Nigeria’s total public debt stock has surged by 82.4% over a three-year period under President Bola Ahmed Tinubu’s administration.

The country’s public debt has become one of the defining economic policy issues that has persisted over time.

According to the latest data released by the Debt Management Office (DMO), the national debt expanded from ₦87.38 trillion in the first half (H1) of 2023, when Tinubu assumed office to ₦159.35 trillion in H1 2026.

This reflects a steep ₦71.97 trillion increase in the nation’s debt profile.

Naira Devaluation

Analysts have said this debt surge was primarily due to currency devaluations, which inflated the naira value of foreign debt obligations, as well as ongoing fiscal budget deficit financing and domestic bond issuances.

The debt surge equally underscores the government’s continued reliance on fiscal borrowing to fund deficit spending, infrastructure projects, and structural economic adjustments.

Pinnacle Daily’s analysis of the debt trajectory shows a progressive increase over the three years.

From ₦87.38 trillion in the first half of 2023, it increased by 11.4 per cent to ₦97.34 trillion by the end of the year (December 2023). It subsequently jumped by 37.97 per cent to ₦134.3 trillion in H1 2024, ₦144.67 trillion in H2 2024, ₦152.39 trillion in H1 2025, ₦159.28 trillion in H2 2025, and ₦159.35 trillion in H1 2026.

In the three years under review, the country only recorded the lowest rate of increase in the debt stock in the last six months (between H2 2025 and H1 2026).

Commenting on the country’s debt profile under the current administration, Nigeria’s Minister of Finance and Coordinating Minister of the Economy, Mr. Taiwo Oyedele, attributed a significant portion of the increase to the depreciation of the naira, stating that the rise was largely driven by the revaluation of external loans rather than fresh borrowing.

According to the Minister, the foreign currency component of Nigeria’s public debt had to be reevaluated following the depreciation of the naira, adding more than ₦40 trillion to the public debt figure through accounting adjustments alone at the time.

Oyedele explained that comparisons between the current debt stock and the debt level at the beginning of the administration created a misleading impression that the government had embarked on excessive borrowing.

Ways and Means Securitisation

Another major contributor to the increase in the debt stock was the securitisation of the Ways and Means advances inherited from the previous administration.

The National Assembly-approved exercise added about ₦33 trillion to the official public debt, though the Minister stressed this represented existing obligations being formally recognised rather than fresh borrowing.

“About ₦33 trillion was added to the public debt through that process. It was not new borrowing; it was simply bringing previously existing obligations onto the official debt books,” Oyedele explained to the Senate Committee on Finance.

Debt Service Burden

Despite the explanations regarding the nature of the debt increase, analysts have noted that the cost of servicing Nigeria’s debt remains a significant concern.

Between 2020 and 2024, Nigeria spent a total of ₦30.81 trillion on debt servicing, with revenue of ₦51.05 trillion during this period, meaning 60.35 per cent of revenue was spent on debt servicing.
Year-by-year breakdown shows that the country spent ₦3.34 trillion on debt servicing in 2020.

It dropped to ₦2.93 trillion in 2021, rose again to ₦3.76 trillion in 2022, and more than doubled in 2023, reaching ₦7.66 trillion. The debt service costs jumped from ₦7.66 trillion in 2023 to ₦13.12 trillion in 2024. For the 2026 fiscal year, Nigeria is projected to spend over ₦15.5 trillion just on servicing its debt.

Domestic borrowing currently accounts for the lion’s share of the burden at ₦87.40 trillion (54.85%), while external debt stands at $51.90 billion.

The mechanical trap is that Nigeria earns Naira but must pay interest in Dollars. Every time the Naira devalues against the Dollar, the cost of servicing that debt mechanically explodes.

Refinancing, Not New Borrowing

The Minister of Finance also clarified that much of the Federal Government’s domestic borrowing had been undertaken to refinance maturing debts rather than accumulate new liabilities. “Debt that was borrowed previously matures, and the government raises new debt to refinance it. That is not new borrowing,” he added.

Oyedele maintained that the Tinubu administration had adopted a cautious borrowing strategy centred on infrastructure development, economic expansion, and debt sustainability.

Debt Sustainability Debate

A report by The Briefing – Macro & Markets countered growing fears over Nigeria’s rising public debt profile, arguing that recent narratives suggesting the country was sliding into a debt crisis were misleading because they relied heavily on nominal Naira figures without adjusting for FX distortions and historical liabilities.

The report noted that when the debt stock was measured in dollar terms, Nigeria’s total public debt was about $108.2 billion in March 2023 and rose only marginally to $110.9 billion by December 2025, representing a real increase of approximately 3 per cent over nearly three years.

Nigeria’s debt-to-GDP ratio stood at 36.1 per cent in 2025, below the global average of about 92 per cent. However, the more critical issue confronting the country remains the rising cost of servicing obligations amid elevated interest rates and weak government revenues.

Expert Concerns

Economic experts have expressed concern over Nigeria’s rising debt profile and the high cost of servicing the debt.

Dr Samson Simon, Chief Economist at Arkk Economics and Data Limited, said Nigeria is operating above the debt ceiling recommended by the International Monetary Fund (IMF).

According to him the IMF recommended that for developing countries like Nigeria, 30 per cent of the revenue at most should be used for debt servicing.

Speaking in an interview on News Central TV, Dr Simon expressed concern that Nigeria has exceeded that recommendation and is currently spending more than 50 per cent of revenue on debt service. “It is a huge problem for Nigeria,” he stated.

Though debt service to revenue ratio was higher in previous years, Simon insisted that the current level raises a red flag.
In 2020, it was 83 per cent, but dropped to 71.8 per cent in 2021. It however rose to 97 per cent in 2022 but dropped to 67 per cent in 2023 and 61 per cent of. 2024.

Simon argued that Nigeria’s problem isn’t necessarily the size of debt relative to GDP, but debt service remains a problem.

He said: “The problem is actually debt service and that is why many people in government have been claiming that Nigeria has a revenue problem not a debt problem. But if you ask me it is both ways. Because these debts are accumulated over time.”

READ ALSO: 

• Debt Pressure Deepens Despite Signs of Stability, NESG Warns
• Dangote, BUA, HBM Profit Rise 40.36% to ₦1.16trn in 6 Months 
• Nestlé Nigeria Records Strong Revenue Growth as Profit Rises 28% to N64.8bn in H1 2026
• Reject Sugar Tax Bill, CPPE Tells Reps, Warns of Job, Investment Losses
• Heavy Debt Burden Clouds TotalEnergies Marketing Nigeria’s Earnings Outlook
• Naira Devaluation Added Over ₦40tn to Nigeria’s Debt, Not Fresh Borrowing — FG

He said the country is still struggling to meet the revenue target for the budget let alone bring down the debt burden.
He said the government needs to find ways to generate more revenue. He stressed that the government must not resort to increasing the tax rate, which could raise the tax burden, but there are innovative ways to expand the revenue base without punishing the people already grappling with poverty.

Economist, Prof. Akpan Ekpo, said borrowing is okay when it is
deployed to financing capital projects not recurrent (consumption).

Reacting to the argument that looking at the nation’s debt-to-GDP ratio the debt is still within threshold, Prof. Ekpo echoed similar concerns that GDP does not pay debt but revenue does.

He warned that if not properly managed, the future generations may inherit and pay the debts.

Ekpo called for efficient utilisation of funds obtained through loans.

He also urged the government to embrace public private partnership (PPP) in financing long-term projects instead of borrowing, stressing that through PPP, both parties would bear the financial risks equally.

“If we must borrow, it should be more domestic and less external,” Ekpo advised.

He suggested 65 per cent domestic borrowing and 35 per cent external to mitigate burdens created by exchange rate volatility and currently devaluation.

He also called for a pause in new borrowings.