Nigeria’s debt reaches N159.3tn – Nigerian Ripples

Nigeria’s total public debt has risen to reach N159.28 trillion as of December 31, 2025, according to data released on Tuesday by the Debt Management Office (DMO).

The latest figures driven by new domestic and foreign loans show a quarter-on-quarter increase of N5.98tn, or 3.9 percent, from N153.29tn recorded at end-September 2025, and a year-on-year increase of N14.61tn, or 10.1 percent, from N144.67tn as of December 31, 2024.

External debt rose from N71.48tn in September 2025 to N74.43tn in December 2025, representing an increase of N2.95tn or 4.1 percent.

Likewise, domestic debt increased from N81.82tn to N84.85tn in the same period, reflecting an increase of N3.03tn or 3.7 per cent.

Despite the increase, domestic debt remains the largest component of the country’s debt stock, amounting to 53.27 percent of total government debt in December 2025, compared to foreign debt which reached 46.73 percent.

This structure is generally unchanged compared to September 2025, when domestic debt accounted for 53.37 percent and foreign debt reached 46.63 percent of total debt, indicating a stable debt composition during the quarter.

Further details show that the Federal Government remains the dominant borrower, particularly in the domestic market.

The Federal Government’s internal debt increased from N77.81tn in September 2025 to N80.49tn in December 2025, while the internal debt of the states and the Federal Capital Territory increased from N4.00tn to N4.36tn in the same period.

In dollar terms, Nigeria’s total public debt increased from $103.94 billion in September 2025 to $110.97 billion in December 2025, reflecting an increase of $7.04 billion in the quarter.

External debt increased from $48.46 billion to $51.86 billion, while domestic debt increased from $55.47 billion to $59.12 billion in the same period.

However, the naira value of external debt is partly moderated by exchange rate movements, as the DMO implemented an official rate of N1,474.85 to one dollar in September 2025 and N1,435.26 to one dollar in December 2025.

Based on year-on-year data, data shows that domestic borrowing is the main driver of Nigeria’s increase in debt.

Total domestic debt rose from N74.38tn in December 2024 to N84.85tn in December 2025, representing an increase of N10.47tn or 14.1 percent.

In contrast, external debt increased from N70.29tn to N74.43tn in the same period, reflecting an increase of N4.14tn or 5.9 per cent.

The Federal Government accounts for the bulk of the debt stock, with N66.27tn external debt and N80.49tn domestic debt as of December 2025, while states and the FCT recorded N8.16tn and N4.36tn respectively.

Compared with the previous year, the Federal Government’s domestic debt increased significantly, strengthening its position as the main source of debt accumulation in the period.

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The composition of debt also experienced a slight shift this year. External debt, which accounted for 48.59 percent of total debt in December 2024, decreased to 46.73 percent in December 2025, while domestic debt increased from 51.41 percent to 53.27 percent in the same period.

Speaking at a panel session on Monday at the ongoing IMF Spring Meetings in Washington, DC, Director General of the Office of Debt Management, Patience Oniha, said Nigeria’s borrowing process is subject to strict legislative approval and oversight, which helps strengthen transparency and investor confidence.

He noted that under the Fiscal Responsibility Act and the DMO Act, all loans, whether domestic or external, must be approved by the National Assembly before being contracted.

Oniha said this process ensures that lawmakers scrutinize the terms, lenders and implications of each loan, including its impact on debt sustainability and fiscal space.

“The request is presented to them for detailed analysis… and they invite us to come and defend it… If they are not satisfied, they ask you to come back and provide further information. That is only when the loan can be approved and contracted,” he said.

He added that the approval process, which is often conducted in public and sometimes broadcast on television, ensures that borrowing plans are widely known, strengthening accountability.

According to him, the requirement of legislative approval before making loans helps reduce risks for investors by demonstrating compliance with the legal framework and increasing transparency.

“When they see that the process has gone through parliamentary approval, it shows them that we are complying with the law… it builds confidence that the process is transparent and legitimate,” he said.

The DMO boss also said that the agency regularly publishes debt data and presents performance reports to relevant committees in the National Assembly, which include debt stock, payment of obligations and projections.

However, he noted that the system could be further strengthened through capacity building in legislative bodies, especially considering the increasing complexity of debt instruments and market conditions.

“We need regular capacity building in parliament… the market is more complex now, and sometimes there are new members on these committees who may not have a technical background,” he said.

Oniha added that frequent changes in lawmakers and time constraints in the legislative calendar can affect the depth of scrutiny applied to loan requests, especially when approvals are rushed towards the end of the fiscal cycle.

He also called for stronger collaboration with development partners such as the World Bank and IMF to support more intensive training for parliamentarians, including exposure to global best practices in debt management.

According to him, apart from increasing technical understanding of debt instruments, stakeholders should also focus on how loans affect fiscal space and long-term development, and emphasize the need to balance debt with revenue mobilization.

“We have to look at how debt can affect fiscal space, how debt can support development, and at what point we should start focusing more on revenue rather than continuing to borrow,” he said.