Nigeria’s total public debt has risen sharply to N144.67 trillion ($94.23 billion) as of December 31, 2024, marking a massive 48.58% increase in just one year, according to the latest report released by the Debt Management Office (DMO).
The country’s debt stock stood at N97.34 trillion ($108.23 billion) at the end of 2023. The increase of N47.32 trillion over twelve months reflects Nigeria’s growing dependence on both foreign and local borrowing to fund budget deficits and meet financial obligations.
A financial analyst, Tola Adebayo in an interview said, “This continued rise in public debt is worrying. While borrowing itself is not bad, the rate at which Nigeria is accumulating debt, especially foreign debt, is a red flag for our economy.”
External Debt Jumps by Over 80%
According to the DMO report, Nigeria’s external debt surged by 83.89%, climbing from N38.22 trillion ($42.50 billion) in December 2023 to N70.29 trillion ($45.78 billion) at the end of 2024.
This sharp rise was largely due to new loans from foreign lenders and the fall of the naira, which made existing dollar debts more expensive in naira terms.
Dr. Mary Okon, an economist said, “The naira depreciation is making it costlier for Nigeria to service its external debts. If the currency continues to weaken, debt repayment will take up even more of the government’s revenue.”
Domestic Debt Also on the Rise
The report also shows that domestic debt rose from N59.12 trillion ($65.73 billion) in December 2023 to N74.38 trillion ($48.44 billion) by December 2024. This marks a 25.77% increase, with the Federal Government responsible for the bulk of this debt.
The Federal Government’s domestic borrowings rose by 32.19%, from N53.26 trillion to N70.41 trillion within the year. Analysts say this increase reflects the government’s continued reliance on local borrowing to finance major projects and plug gaps in the national budget.
However, unlike the Federal Government, states and the Federal Capital Territory (FCT) reduced their local borrowings. Their domestic debt fell by 32.27%, from N5.86 trillion to N3.97 trillion.
Professor Kabiru Adeyemi, a public finance expert, noted, “This cautious approach by some states is a good sign. It shows that subnational governments are becoming more aware of the risks of excessive borrowing.”
Debt Rose by N2.35tn in Three Months
On a quarterly basis, Nigeria’s public debt grew by N2.35 trillion, or 1.65%, between September and December 2024. The total debt increased from N142.32 trillion in September to N144.67 trillion by the end of December.
During this period, external debt rose by N1.4 trillion, driven by new foreign loans and the further weakening of the naira. At the same time, domestic debt increased slightly from N73.43 trillion to N74.38 trillion, reflecting a 1.29% rise.
The Federal Government’s share of the domestic debt increased from N69.22 trillion in September to N70.41 trillion in December. However, states and the FCT reduced their domestic borrowing from N4.21 trillion to N3.97 trillion, showing a 5.69% drop.
Federal Government Holds Majority of Debt
A breakdown of the debt shows that the Federal Government owes the majority of both external and domestic debt. As of December 2024:
External Debt:
– Federal Government: N62.92 trillion ($40.98 billion)
– States and FCT: N7.37 trillion ($4.80 billion)
Domestic Debt:
– Federal Government: N70.41 trillion ($45.86 billion)
– States and FCT: N3.97 trillion ($2.58 billion)
In total, the Federal Government alone owes over N133 trillion, highlighting its dominant role in the country’s borrowing activities.
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A Balanced Yet Risky Debt Mix
The DMO noted that Nigeria’s debt is fairly balanced between foreign and local sources. As of December 2024:
– External debt accounts for 48.59% of total public debt.
– Domestic debt makes up 51.41%.
Despite this balance, many experts warn that the growing share of foreign debt poses serious risks.
Dr. Okon said, “Borrowing in foreign currencies means Nigeria must earn enough dollars to repay those debts. With oil revenues fluctuating and the naira falling, this becomes more challenging.”
Economic Analysts Raise Alarm
Several economic analysts have raised concerns over the sustainability of Nigeria’s growing debt.
Tola Adebayo said, “The government must be transparent about how it spends borrowed funds. We need to see these loans going into productive sectors like infrastructure, power, and education.”
He added, “Borrowing to pay salaries or fund wasteful spending will only lead to more borrowing in the future.”
Others have called for reforms to boost government revenue, especially through tax reforms and reduction in oil theft.
Prof. Adeyemi said, “Nigeria must improve its revenue collection. If we don’t increase our earnings, we’ll keep borrowing, and future generations will bear the burden.”