Nigeria’s total public debt soared to N144.67 trillion (equivalent to $94.23 billion) as of December 31, 2024, marking a substantial year-on-year increase of 48.58% compared to N97.34 trillion ($108.23 billion) reported at the end of December 2023. This sharp rise was disclosed in a new report released by the Debt Management Office (DMO), offering insights into the nation’s evolving debt profile.
Quarter-on-Quarter Growth
On a quarter-on-quarter basis, the debt burden also grew, rising by 1.65% from the N142.32 trillion ($88.89 billion) recorded in September 2024. This continuous increase suggests a persistent reliance on both internal and external borrowing through the last quarter of the year.
Year-on-Year Analysis
A breakdown of the debt figures over the 12-month period shows that Nigeria’s public debt increased by N47.32 trillion, amounting to a 48.58% rise between December 2023 and December 2024. This surge was mainly fueled by notable increases in both external and domestic debt:
- External Debt jumped significantly by 83.89%, climbing from N38.22 trillion ($42.50 billion) in December 2023 to N70.29 trillion ($45.78 billion) in December 2024.
This dramatic increase was driven by two key factors:- Fresh external loans acquired by the government during the year.
- The depreciation of the naira, which inflated the local currency value of Nigeria’s dollar-denominated obligations.
- Domestic Debt also rose considerably, growing by 25.77% from N59.12 trillion ($65.73 billion) to N74.38 trillion ($48.44 billion) over the same period.
Within this category:- The Federal Government’s domestic debt grew from N53.26 trillion to N70.41 trillion, reflecting a 32.19% increase, highlighting the government’s heavy use of local borrowing to bridge budget deficits and fund capital projects.
- In contrast, the debt owed by states and the Federal Capital Territory (FCT) decreased from N5.86 trillion to N3.97 trillion, a 32.27% decline. This suggests a more cautious borrowing stance adopted by some subnational entities.
Quarter-on-Quarter Analysis
Comparing the final quarter of 2024 with the third quarter, Nigeria’s total public debt rose by N2.35 trillion, showing a 1.65% quarterly increase.
- External debt rose by N1.4 trillion, moving from N68.89 trillion ($43.03 billion) in September to N70.29 trillion ($45.78 billion) by December.
This rise was influenced by:- Additional foreign loans secured in Q4.
- Further depreciation of the naira, which increased the naira value of outstanding foreign loans.
- Domestic debt experienced a modest growth of 1.29%, increasing from N73.43 trillion ($45.87 billion) in September to N74.38 trillion ($48.44 billion) by year-end.
- The Federal Government’s portion went up from N69.22 trillion to N70.41 trillion.
- However, state and FCT debt dropped from N4.21 trillion to N3.97 trillion, marking a 5.69% reduction.
Debt Composition Overview
As of December 2024, Nigeria’s public debt was almost evenly split between external and domestic sources:
- External debt accounted for 48.59%, while
- Domestic debt made up 51.41%.
This balance indicates a dual approach to borrowing, though the increasing tilt towards external debt signals rising reliance on foreign sources to finance fiscal shortfalls.
Further breakdown reveals:
- Of the external debt, the Federal Government was responsible for N62.92 trillion ($40.98 billion), while states and the FCT held N7.37 trillion ($4.80 billion).
- In the domestic segment, the Federal Government owed N70.41 trillion ($45.86 billion), whereas states and the FCT accounted for N3.97 trillion ($2.58 billion).
Key Implications and Concerns
The steep rise in Nigeria’s public debt has triggered widespread concern among economic analysts and stakeholders. Particular worry centers around the sharp increase in external debt, which exposes the nation to currency volatility and rising debt servicing costs. As the naira continues to weaken, the financial burden of repaying dollar-denominated loans is expected to grow, straining the country’s already tight fiscal space.
Furthermore, the consistent borrowing trend both domestically and internationally reflects deeper structural issues, such as:
- Persistent budget deficits,
- Revenue generation challenges, and
- An urgent need for large-scale infrastructure investments.
These fiscal challenges underscore the importance of implementing sustainable debt management strategies and improving government revenue to ensure long-term financial stability.
