The Facts About Nigeria’s Debts Burden Under Tinubu’s Watch By Zekeri Idakwo Laruba
With political campaigning unofficially underway for the 2027 general elections, Economic Confidential observes that Nigeria’s mounting debt burden under the administration of President Bola Ahmed Tinubu has become a central theme in debates over the country’s economic direction. While some of the challenges were inherited, the rapid accumulation of debt in just under two years highlights pressing issues in policy implementation, revenue generation, and spending discipline.
Nigeria is grappling with an escalating public debt crisis that has deepened under the current administration, casting a shadow over the country’s economic recovery efforts and fiscal sustainability. Since assuming office in May 2023, the administration has overseen a staggering increase in the national debt, sparking growing concern among economists, investors, and development partners.
According to official figures from the Debt Management Office (DMO), Nigeria’s total public debt stood at ₦87.38 trillion as of June 30, 2023. By March 31, 2025, less than two years later, the debt had ballooned to ₦149.39 trillion—a dramatic increase of approximately 71%.
This sharp increase not only reflects inherited fiscal challenges but also underscores the Tinubu administration’s direct role in shaping the current debt trajectory. While the government has implemented some key financial reforms, including the securitization of the Central Bank’s Ways and Means Advances, the pace of debt accumulation has raised red flags about long-term sustainability.
Economic Confidential reports that the administration’s early months were marked by the approval and securitization of ₦22.7 trillion in Ways and Means Advances—overdrafts from the Central Bank of Nigeria (CBN) used to fund previous government shortfalls. While this move was aimed at increasing transparency and easing monetary policy pressures, it immediately inflated the debt profile and revealed the full extent of the nation’s fiscal strain.
From June 2023 to March 2025, Nigeria’s debt surged by ₦62.01 trillion in just 22 months. The DMO’s quarterly reports not only chronicle the raw figures but also serve as a financial barometer for evaluating the administration’s fiscal management. Despite targeted reforms, borrowing has remained the government’s primary response to widening deficits and mounting expenditure demands.
Economic Confidential discovered that one of the most notable trends in Nigeria’s debt profile has been the shift in the balance between external and domestic borrowings. In June 2023, domestic debt made up 61.95% of the total, while external debt accounted for 38.05%. By March 2025, this balance had nearly equalized, with domestic debt at 52.7% (₦78.76 trillion) and external debt at 47.3% (₦70.63 trillion). This near parity suggests a strategic diversification of borrowing sources, but it also reflects increasing reliance on external loans.
Read Also:
However, this shift has increased Nigeria’s exposure to currency volatility. As the Naira weakened drastically—from approximately ₦770/$ in June 2023 to around ₦1,550/$ in July 2025—the Naira equivalent of external debt has nearly doubled, making servicing costs much higher and adding further strain to national reserves.
The debt burden remains heavily concentrated at the federal level. By March 2025, the Federal Government of Nigeria (FGN) held over 92% of the total debt, underscoring its predominant role in the country’s borrowing spree. This trend reinforces the central government’s control over fiscal policy and raises concerns about the limited fiscal space left for subnational entities. States already face mounting pension liabilities, salary backlogs, and infrastructural deficits, which they must now manage amid tighter federal fiscal conditions.
Experts who spoke to Economic Confidential noted that several interrelated factors have fueled Nigeria’s ballooning debt. The securitized ₦22.7 trillion CBN overdraft was a one-time addition that boosted transparency but significantly raised the national debt figure, highlighting past fiscal indiscipline. The dramatic weakening of the Naira has inflated the local value of external loans, pushing debt servicing costs higher and increasing vulnerability to currency shocks.
Despite reforms, Nigeria continues to suffer from limited revenue generation. Oil earnings remain unstable due to production challenges and price volatility, while non-oil revenue collection has not grown quickly enough to close the budget gap. Government spending on infrastructure, security, subsidies, and social programs has outpaced available revenues. With limited alternatives, borrowing has become a recurring solution to cover budget deficits. Economists have also cautioned against excessive use of domestic borrowings and non-concessional external loans. High interest rates on these instruments raise long-term repayment costs and risk debt sustainability.
One of the most troubling aspects of Nigeria’s debt trajectory is the surging cost of servicing these obligations. A recent report by the African Development Bank found that debt servicing costs consumed 77.5% of the federal government’s revenue in 2024. This dynamic, if left unchecked, could lock Nigeria into a cycle of stagnation and fiscal fragility. For instance, the 2025 budget allocates a significant portion of its expenditure to debt servicing, leaving little room for infrastructure, education, or healthcare—key areas required for long-term growth and social development.
As the Tinubu administration enters its third year, it faces a critical fiscal crossroads. The combination of high debt, depreciating currency, inflation, and weak revenue calls for urgent and decisive action. Policy experts have emphasized the need to enhance non-oil revenue collection through taxation reforms and digital tracking, improve public financial management and reduce wasteful expenditures, re-negotiate debt terms where possible and limit new borrowing to concessional loans, strengthen institutions like the DMO and Fiscal Responsibility Commission, and promote transparency and public accountability in debt usage and service.
Zekeri Idakwo Laruba is Assistant Editor Economic Confidential
