Data from the Debt Management Office (DMO) shows that Nigeria’s debt profile stood at N144.665 trillion, approximately $94.2 billion, as of December 31, 2024.

Nigeria’s debt is a complex and evolving landscape that has increased recently, primarily driven by budget deficits, exchange rate depreciation, and the need for infrastructure financing.

Debt composition

The DMO data shows that as of Q1 2024, Nigeria's public debt stood at N121.67 trillion (US$91.46 billion). By December 2024, it further increased to N144.67 trillion.

Domestic Debt: As of Q1 2024, domestic debt was N65.65 trillion (US$49.35 billion), accounting for 53.95% of the total public debt. External Debt: As of Q1 2024, external debt was N56.02 trillion (US$42.12 billion), making up 46.05% of the total.

Top creditors

In December 2024, external debt constituted 48.59% of Nigeria's total public debt, while domestic debt made up 51.41%, indicating a relatively balanced debt structure.

Multilateral Institutions include the World Bank (International Development Association (IDA), International Bank for Reconstruction and Development (IBRD)

Others include the African Development Bank (AfDB) and the Islamic Development Bank (IsDB).

Bilateral Creditors include China, France, Germany, and Japan.

Private Lenders include Eurobond holders (a substantial portion of external debt).

High debt service-to-revenue ratio

A large portion of government revenue is allocated to servicing debt, leaving less for essential public services, infrastructure development, and social programs.

In 2024, debt service as a percentage of revenue rose to 83%, and it continues to consume a significant share of the national budget.

Crowding out private investment

Experts say high domestic borrowing by the government can lead to increased interest rates, making it more expensive for private businesses to borrow and invest, thereby stifling economic growth.

According to them, a substantial portion of Nigeria's external debt is denominated in foreign currencies (primarily USD).

The Naira depreciation significantly inflates the local currency value of this debt, making it more expensive to service and increasing the overall debt burden.

Additionally, the substantial debt burden limits the government's ability to respond to economic shocks or implement expansionary fiscal policies to stimulate growth.

“The perception of a heavy debt burden can deter foreign investment, as investors might be concerned about the country's ability to meet its obligations,” Osas Igho, a financial analyst, said.

According to him, financing deficits through domestic borrowing, especially from the Central Bank, can contribute to money supply growth and inflationary pressures.

Debt per citizen

As of September 2024, Nigeria's public debt totalled N142.3 trillion, equivalent to approximately N624,527 per person.