Nigeria’s public debt soars to N149trn as China, World Bank emerge top creditors

BY MOTOLANI OSENI

Nigeria’s public debt has risen sharply to N149.39 trillion as of March 31, 2025, underscoring growing fiscal challenges and intensifying concerns about the country’s long-term debt sustainability.

The latest figures from the Debt Management Office indicate that the total debt stock increased by N27.72 trillion or 22.8 per cent year-on-year from N121.67 trillion in Q1 2024.

Quarterly, the debt climbed by N4.72 trillion, up from N144.67 trillion recorded at the end of December 2024.

The spike in public debt is attributed to a mix of fresh borrowings, surging debt service obligations, and the impact of the naira’s depreciation on foreign currency-denominated liabilities. Nigeria’s external debt now stands at $45.9 billion, which translates to N70.63 trillion at the current exchange rate. Multilateral institutions remain the largest creditors, with the World Bank’s exposure rising to $18.3 billion from $17.8 billion in the previous quarter.

The African Development Bank holds $3.5 billion in loans across multiple instruments, while the International Monetary Fund, whose $406 million facility has now been repaid, no longer holds a balance.

China remains Nigeria’s top bilateral lender with a total loan portfolio of $5.16 billion, accounting for over 85 per cent of all bilateral obligations. France follows with $609 million, bringing the country’s total bilateral debt to $6.7 billion.

Nigeria’s Eurobond obligations remained unchanged at $17.32 billion, a longstanding component of the country’s debt portfolio that continues to pose refinancing risks amid elevated global interest rates.

On the domestic side, debt climbed to N78.76 trillion, with Federal Government bonds making up the bulk at N59.8 trillion, representing 79.85 per cent of the local debt stock. Treasury bills accounted for N12.7 trillion, while promissory notes declined to N1.3 trillion from N1.54 trillion following partial settlements.

Other domestic instruments include FGN Sukuk bonds at N992.6 billion, Green Bonds at N15 billion, and FGN Savings Bonds at N82.6 billion. These instruments, while helpful in funding infrastructure and expanding retail participation, point to an increasing reliance on local borrowings in the face of sluggish revenue growth.

Debt servicing is projected to jump from N8 trillion in 2024 to N16 trillion in 2025, raising alarm over the country’s fiscal trajectory. Economists warn that Nigeria’s growing appetite for debt without commensurate revenue expansion could deepen its vulnerability to external shocks and rising borrowing costs.

Meanwhile, there are growing calls for urgent reforms to boost non-oil revenues, streamline public spending, and enforce greater fiscal discipline. Without decisive action, Nigeria may find itself in a more precarious financial position, with limited room to respond to future economic disruptions. As inflation and exchange rate volatility persist, the weight of rising debt obligations is increasingly casting a long shadow over the country’s economic stability and investment outlook.