Nigeria’s N159.28tn Debt Raises Fresh Concerns Over Borrowing, Fiscal Sustainability
Nigeria’s N159.28tn Debt Raises Fresh Concerns Over Borrowing, Fiscal Sustainability
Nigeria’s rising public debt, estimated at N159.28 trillion by mid-2026, has triggered renewed concerns over the Federal Government’s borrowing strategy, debt sustainability and the long-term implications for the country’s economy.
The debate has intensified following engagements involving government fiscal authorities and the Senate over the continued increase in public borrowing under President Bola Ahmed Tinubu’s administration.
Government officials have argued that the sharp rise in Nigeria’s naira-denominated debt does not entirely represent fresh borrowing. Part of the increase has been attributed to the depreciation of the naira against the United States dollar and other foreign currencies, which significantly increased the naira value of Nigeria’s external debt.
Another factor cited is the incorporation of previously existing liabilities, including the securitisation of Ways and Means advances inherited from the previous administration.
Nigeria’s public debt increased significantly during former President Muhammadu Buhari’s administration, rising from about N12.5 trillion in 2015 to approximately N75 trillion in 2023. The debt burden has since continued to expand amid currency depreciation, inherited obligations and additional borrowing.
Available figures cited from the Debt Management Office put Nigeria’s total public debt by mid-2026 at approximately N159.28 trillion, equivalent to about $110.97 billion.
While exchange-rate movements can substantially inflate the naira value of foreign-denominated obligations, concerns remain over the pace of new borrowing and the country’s ability to generate sufficient revenue to comfortably meet its debt obligations while financing development.
The debate has become particularly significant because the Federal Government removed petrol subsidy in 2023, a policy expected to reduce one of the major pressures on public finances. Nigerians are consequently demanding greater clarity on how savings from subsidy removal, increased government revenues and borrowed funds are being deployed.
Economists generally recognise that borrowing is not inherently detrimental to an economy when loans are channelled into productive investments capable of generating economic growth, employment and additional government revenue.
Infrastructure such as roads, railways, electricity, ports, healthcare facilities and other economically productive projects can justify borrowing when the expected returns exceed financing costs.
However, debt becomes increasingly problematic when borrowed resources are consumed by recurrent expenditure, inefficient projects or administrative costs without creating sufficient economic value to support repayment.
Another major concern is Nigeria’s fiscal deficit. Continued deficit financing means the country could require additional borrowing unless government revenue rises substantially or expenditure pressures are reduced.
Questions surrounding the cost of governance have therefore become increasingly relevant to the national debt debate. Fiscal sustainability will require tighter expenditure controls, improved transparency, greater accountability and stronger mechanisms to prevent leakages in public finances.
The National Assembly also has an important responsibility in scrutinising borrowing requests. Beyond approving loans, lawmakers are expected to examine their purpose, repayment conditions and economic benefits before committing future government revenues to additional obligations.
Particular attention must be paid to foreign currency-denominated debt because substantial depreciation of the naira can dramatically increase the domestic cost of servicing external obligations.
Nigeria is not alone in confronting rising public debt. Several developing economies, particularly across Sub-Saharan Africa, have relied heavily on borrowing and fiscal stimulus to support economic growth and respond to economic shocks. However, persistent deficits and accumulating debt have reduced the fiscal flexibility available to many governments.
For Nigeria, the critical issue is therefore not simply the headline N159.28 trillion debt figure but the country’s capacity to manage its obligations without sacrificing essential public investment or transferring an unsustainable financial burden to future generations.
The Federal Government must consequently strengthen its debt management strategy, improve domestic revenue mobilisation and ensure that future borrowing is tied predominantly to economically viable projects capable of improving productivity.
Greater transparency is equally necessary. Nigerians should be able to determine how much is being borrowed, the terms of individual loans, projects being financed and measurable economic benefits generated from such borrowing.
Nigeria’s growing debt profile does not automatically constitute an economic crisis, but allowing borrowing to consistently outpace revenue growth and productive investment could create serious fiscal vulnerabilities.
With public debt now estimated at N159.28 trillion, the challenge before the government is to demonstrate that every additional borrowing decision is sustainable, economically justified and capable of contributing to growth rather than simply expanding the country’s repayment obligations.
