Nigeria’s Total Public Debt Hits Record ₦152.4 Trillion, Driven by Naira Depreciation and Massive Fiscal Deficits

The Nigerian Economic Summit Group (NESG) has issued a sobering assessment of the nation’s fiscal health, revealing that Nigeria’s debt stress has reached its highest level on record. According to findings from the group’s newly introduced Debt Burden Index (DBI), the country is currently operating under conditions of “structural fragility and fiscal exhaustion.”

The DBI, a sophisticated composite metric designed to capture a more accurate picture of fiscal stress by integrating solvency, liquidity, and revenue capacity, peaked at a critical 83.6 points during the period between 2020 and 2023. The report explicitly stated that this “Fiscal Exhaustion phase” was defined by debt service costs exceeding 100 per cent of total government revenue, alongside the severe strain of pandemic-era borrowing and a collapse in revenue.

While traditional debt-to-Gross Domestic Product ratios might appear moderate by global standards, the NESG noted that the index presents a “more sobering reality” driven by weak revenue mobilisation, rigid debt service obligations, and exposure to foreign exchange-sensitive liabilities.

The debt burden’s crushing impact on the foreign exchange market was also highlighted. The PUNCH reported that as of August, Nigeria spent a substantial $2.86 billion to service external debt. This figure alone accounted for a massive 69.1 per cent of the country’s total foreign payments of $4.14 billion during the review period, illustrating the extent to which debt servicing obligations are crowding out funds for other critical imports and economic needs.

The NESG report tracked Nigeria’s debt trajectory through four distinct phases since the 2005 debt relief, with the current period, 2024–2025, being classified as a Tentative Reversal phase. The index showed a mild easing to 70.9 points (estimated 69.0 in Q1 2025), a minimal improvement attributed to recent policy decisions like the removal of the fuel subsidy and foreign exchange reforms. However, the report warned that despite the slight easing, the fiscal strain remains “acute” and continues to erode fiscal space, constrain development spending, and threaten macroeconomic stability.

In a strong call for a fundamental change in fiscal management, the NESG rejected austerity as the solution, instead urging for a “strategic statecraft anchored in transparency, productivity, and fiscal justice.” The group’s policy recommendations include a decisive overhaul of the revenue framework (improving VAT efficiency, enforcing mining royalties, and digitalised property taxation) and a national shift towards net worth-based debt management. This strategy would ensure that future borrowing is disciplined, linked only to productive, growth-inducing projects, and that any increase in liabilities is offset by an equivalent or greater rise in national assets.