Despite rising alarm over Nigeria’s surging debt profile, the Federal Government has borrowed ₦10.85 trillion from domestic investors between January and April 2025, ignoring global warnings about its unsustainable fiscal path.
According to data from the Debt Management Office (DMO), this fresh round of borrowing pushed the country’s total public debt up by 48.6%, reaching ₦144.66 trillion in 2024 from ₦97.34 trillion the previous year. The Federal Government alone is responsible for ₦137.28 trillion, about 95% of the total.
Worryingly, Nigeria spent 150% of its total revenue on debt servicing in 2024, more than double the 65% recorded in 2023. Domestic debt servicing rose 12% year-on-year to ₦5.9 trillion, while external servicing climbed 33% to $4.7 billion, up from $3.5 billion in 2023.
This financial strain further weakened the country’s debt sustainability, with the debt-to-GDP ratio worsening to 52.9% in 2024 from 48.7% in 2023.
The borrowing spree, however, shows no sign of slowing down. Analysis of FGN bond and treasury bill auctions conducted by the DMO and Central Bank of Nigeria revealed a slight 0.7% increase in borrowing from ₦10.767 trillion in the first four months of 2024 to ₦10.85 trillion during the same period in 2025.
Treasury bills accounted for a large chunk of the new debt, rising 8.3% to ₦8.38 trillion in the first four months of 2025.
FGN Savings Bonds also spiked, jumping nearly 50% to ₦17.29 billion. The figures show a fluctuating but persistent upward trend in short-term borrowing.
Investor demand remains high. Over-subscriptions to DMO bond offerings reached ₦3.33 trillion against the ₦1.45 trillion offered within the four months. For example, in February, bonds worth ₦350 billion attracted a massive ₦1.63 trillion in subscriptions.
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Meanwhile, the International Monetary Fund has raised concerns. It warned that Nigeria’s borrowing strategy is out of step with current global risks and advised the government to rein in spending.
In its April 2025 Fiscal Monitor, the IMF stressed the need for fiscal discipline amid a projected global debt increase.
“Fiscal policy should prioritize reducing public debt and establishing and widening buffers to address spending pressures and economic shocks,” the report stated.
While the IMF expects Nigeria’s debt-to-GDP ratio to dip slightly to 52.5% in 2025, it projects that the country’s fiscal deficit will worsen to 4.5% from 3.4% in 2024.
At a press briefing during the IMF–World Bank Spring Meetings, Davide Furceri, Deputy Division Chief at the IMF Research Department, urged Nigeria to act more prudently.
“It’s important to create additional fiscal space. In Nigeria’s case, that means focusing on two things: first, boosting revenue through improved mobilization efforts, and second, scaling up spending in key areas like social protection and investment,” Furceri said.
“We understand that many countries, including Nigeria, face pressing spending needs. But spending must be done wisely. This means stronger prioritization and greater efficiency in how resources are allocated,” he added.
Yet, with domestic investors still eager to lend and the government relying heavily on debt to stay afloat, Nigeria’s fiscal future remains uncertain.