As of December 2024, domestic debt accounted for 51.41 per cent of Nigeria’s public debt, while external debt comprised 48.59 per cent, indicating a near-even split. However, analysts have expressed concern over the rising share of external debt, warning that the country’s exposure to currency fluctuations and global financial dynamics could pose risks to fiscal sustainability.
Abuja, Nigeria – Nigeria’s public debt ballooned to N144.67 trillion as of December 31, 2024, marking a staggering 48.58 per cent increase from N97.34 trillion recorded at the close of 2023. This is according to fresh figures released by the Debt Management Office (DMO) on Friday.
The data indicates a significant rise of N47.32 trillion in the nation’s debt profile within a year, pointing to a growing fiscal burden. On a quarterly basis, the debt stock also witnessed a modest uptick of 1.65 per cent, rising from N142.32 trillion in September 2024.
Breakdown of Debt Composition
The sharp surge in debt was driven by increases in both external and domestic borrowings. External debt rose sharply by 83.89 per cent to N70.29 trillion (equivalent to $45.78 billion), up from N38.22 trillion ($42.50 billion) in December 2023. The escalation was largely attributed to fresh borrowings and the continued depreciation of the naira, which inflated the naira value of dollar-denominated obligations.
Domestic debt also grew significantly, climbing 25.77 per cent year-on-year to N74.38 trillion ($48.44 billion), compared to N59.12 trillion ($65.73 billion) a year earlier. Within this category, the Federal Government’s local debt rose from N53.26 trillion to N70.41 trillion — a 32.19 per cent increase — as the government leaned heavily on local borrowing to finance fiscal deficits and fund infrastructure projects.
In contrast, the debt owed by state governments and the Federal Capital Territory (FCT) declined from N5.86 trillion to N3.97 trillion, a drop of 32.27 per cent. This suggests a more conservative borrowing approach among subnational governments during the year.
Quarterly Developments
Between September and December 2024, the total debt stock increased by N2.35 trillion. The DMO attributed this quarterly rise to both external and domestic debt increases. External debt alone grew by N1.4 trillion, moving from N68.89 trillion ($43.03 billion) in September to N70.29 trillion ($45.78 billion) at year-end. This was spurred by new loans and continued exchange rate pressure on the naira.
On the domestic front, debt inched up by 1.29 per cent within the quarter, from N73.43 trillion ($45.87 billion) in September to N74.38 trillion ($48.44 billion) in December. The Federal Government’s local borrowings rose from N69.22 trillion to N70.41 trillion during the period, while states and the FCT saw their obligations dip from N4.21 trillion to N3.97 trillion — a 5.69 per cent reduction.
Debt Structure and Economic Implications
As of December 2024, domestic debt accounted for 51.41 per cent of Nigeria’s public debt, while external debt comprised 48.59 per cent, indicating a near-even split. However, analysts have expressed concern over the rising share of external debt, warning that the country’s exposure to currency fluctuations and global financial dynamics could pose risks to fiscal sustainability.
A closer look at the breakdown shows that the Federal Government held N62.92 trillion ($40.98 billion) in external debt, while subnational entities (states and FCT) accounted for N7.37 trillion ($4.80 billion). On the domestic side, the Federal Government held the lion’s share at N70.41 trillion ($45.86 billion), with states and the FCT responsible for N3.97 trillion ($2.58 billion).
The growing debt burden has reignited debates around Nigeria’s fiscal health, especially as foreign debt servicing costs continue to rise in tandem with naira depreciation. Analysts have called for more prudent borrowing practices and robust strategies to boost revenue generation in order to ease the nation’s reliance on debt.
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