As Africa's most populous country continues to rely on borrowing to meet its fiscal obligations, Nigeria's total public debt hit its highest level ever.

According to data released on Friday by the Debt Management Office (DMO), the country's debt profile increased to N144.6 trillion at the end of 2024 from N97.3 trillion the year before.

Nigeria's debt, however, decreased in dollar terms, going from $108.2 billion in 2023 to $94.2 billion last year, indicating reduced volatility in the foreign currency market.

“Nigeria’s debt position continues to expand as a policy of borrowing to spark growth is pursued,” Renaissance Capital Africa said in a note recently.

The nation's debt profile has slightly increased as a result of the federal government seeking a $2.2 billion external borrowing in November of last year to partially finance a N9.7 trillion deficit in the 2024 budget, which was later approved by the nation's lawmakers.

A further analysis of the report showed a quarter-over-quarter increase of 1.65 percent from the N142.32 trillion ($88.89 billion) recorded at the end of September 2024, highlighting an increased borrowing.

According to an analysis, Nigeria's national debt increased by N47.32 trillion on an annual basis, or 48.58 percent, between December 2023 and December 2024.

Significant rises in both domestic and foreign borrowing were the main causes of Nigeria's debt explosion.

From N38.2 trillion, or $42.50 billion, in December 2023 to N70.29 trillion, or $45.78 billion, in December 2024, Nigeria's external debt grew by 83.89 percent.

Domestic debt increased by 25.7 percent from N59.1 trillion, or $65.7 billion, at the end of December 2023 to N74.38 trillion, or $48.4 billion, in December 2024, according to additional data analysis.

As of December 2024, external debt accounted for 48.59 percent of Nigeria's total public debt, while domestic debt accounted for 51.41 percent, indicating a relatively balanced debt structure.

This growth suggests that the Nigerian government relied more on domestic borrowings to finance budget and infrastructure projects, as they accounted for 51.4 percent of the total debt profile, with the FGN taking N70.4 trillion and state governments having N3.9 trillion in debt.

Nonetheless, an increasing dependence on foreign debt to fill budgetary deficits is indicated by the increase in external borrowings.

According to the breakdown of external debt, states and the Federal Capital Territory had N7.37 trillion, or $4.80 billion, while the Federal Government held N62.92 trillion, or $40.98 billion.

“Whilst positive in the short term, the rapid expansion of both external and domestic debt is happening at relatively high rates given current global and domestic macroeconomic conditions,” analysts at Renaissance Capital Africa said.

Rising public debt means elevated debt-to-service cost. The rising debt profile, particularly in naira terms, raises concerns over debt sustainability, especially with the exchange rate volatility driving up the local currency cost of external obligations.

Analysts have expressed concerns over the rising debt levels, warning that it could trigger a debt crisis for a country that’s reeling from its worst cost of living crisis in a generation.

Nigeria seeks new $10.50m World Bank loan
Legit.ng reported that the Nigerian government has asked the World Bank for a fresh $10.50 million loan to boost the Central Bank of Nigeria’s (CBN) technical capacity and modernise Nigeria’s domestic payment system.

Data from the World Bank’s website on Thursday, April 3, 2025, shows that the proposed loan seeks to support the integration of technology and data science into the apex bank’s supervisory process.

The facility is expected to help CBN tackle long-standing and new challenges in Nigeria’s evolving financial system while improving the domestic payment system and remittances.