As of March 31, 2025, Nigeria’s total public debt has risen to N149.39tn, Sunday PUNCH reports.

The figure reflects a year-on-year increase of N27.72tn or 22.8 per cent compared to the N121.67tn recorded in the corresponding period of 2024.

According to the Debt Management Office, in a report released on Friday, the figure also reflects a quarter-on-quarter increase of N4.72tn or 3.3 per cent from N144.67tn as at December 31, 2024.

The persistent rise in debt stock is attributed to new borrowings by the Federal Government and the depreciation of the naira, which inflated the local currency value of external loans.

This surge comes against a backdrop of persistent fiscal pressures and continued reliance on both domestic and foreign borrowing to fund public expenditure.

According to the report, external debt stands at N70.63tn ($45.98bn) at the end of the first quarter of 2025, compared to N56.02tn ($42.12bn) in the same period of 2024.

This translates to a year-on-year increase of N14.61tn or 26.1 per cent. In quarter-on-quarter terms, it rose slightly from N70.29tn in December 2024, a marginal increase of N344bn or 0.5 per cent.

While the actual increase in dollar terms was only $3.86bn year-on-year, the depreciation of the naira significantly amplified the growth when converted to local currency.

The Central Bank of Nigeria used an exchange rate of N1,330.26/$1 to convert external debt in Q1 2024.

Although the exact rate used for Q1 2025 was not disclosed in the DMO statement, the higher naira value suggests a weaker exchange rate was applied, reflecting currency volatility.

Nigeria’s external borrowings include loans from multilateral lenders such as the World Bank and African Development Bank, bilateral arrangements, and commercial debt instruments including Eurobonds.

The increase in debt servicing costs, driven by naira depreciation, has raised concerns about the strain on government finances, especially as the country struggles to improve foreign exchange liquidity and stabilise the currency.

On the domestic front, Nigeria’s debt stock climbed to N78.76tn ($51.26bn) in March 2025, up from N65.65tn ($49.35bn) a year earlier.

This represents a year-on-year increase of N13.11tn or 20 per cent. Compared to Q4 2024, domestic debt rose by N4.38tn or 5.9 per cent, up from N74.38tn.

Of the total domestic debt, the Federal Government accounted for N74.89tn, while subnational governments and the FCT held N3.87tn.

This marks a slight decline in state-level domestic debt from N3.97tn in the previous quarter and N4.07tn in Q1 2024, potentially indicating improved debt servicing or a slowdown in fresh borrowings by states.

Domestic debt is made up of instruments such as Federal Government Bonds, Treasury Bills, Sukuk, and Green Bonds.

These are used to finance the fiscal deficit and are less vulnerable to exchange rate fluctuations, though they carry interest cost implications and can crowd out private sector access to credit.

The overall structure of Nigeria’s debt portfolio has shifted slightly. As of March 2025, domestic debt represented 52.7 per cent of the total, while external debt accounted for 47.3 per cent.

This compares to 54 per cent domestic and 46 per cent external recorded in March 2024.

The increase in the external component — especially in naira terms — underlines the exposure of Nigeria’s debt stock to currency risk.

At the same time, the steady rise in domestic borrowing underscores the government’s increasing use of the local capital market, despite associated challenges such as rising interest rates and investor appetite.