Nigeria’s debt burden has ballooned dramatically in recent years, threatening the country’s economic stability and casting doubt on its future prospects. Once celebrated as Africa’s largest economy with vast natural and human resources, Nigeria now struggles under the weight of unsustainable borrowing, poor fiscal management, and leadership that prioritizes short-term fixes over long-term development.
As of early 2025, Nigeria’s total public debt exceeds ₦97 trillion, according to the Debt Management Office (DMO). This figure combines domestic and external debts and has been growing rapidly. Successive administrations have relied heavily on borrowing primarily to cover recurrent expenditures – paying salaries, servicing previous debts, and funding bloated government operations – rather than investing in critical infrastructure, education, or healthcare.
While Nigeria’s debt-to-GDP ratio appears manageable at around 37%, the more worrying metric is the debt service-to-revenue ratio. Currently, over 70% of government revenue is devoted solely to servicing debt. In practical terms, this means that for every ₦100 earned, more than ₦70 goes toward debt repayment, leaving little for developmental spending or poverty alleviation in a nation where over 60% live below the poverty line.
What compounds this crisis is the lack of strategic planning and transparency surrounding borrowing. Many loans, both foreign and domestic, are not tied to viable projects that generate economic returns. Instead, funds have often been misappropriated, lost to corruption, or channeled into political patronage. Infrastructure loans frequently suffer from delays, cost overruns, and inefficiencies, diminishing their intended benefits.
This pattern creates a vicious cycle where Nigeria borrows more to service old debts, edging closer to a debt trap—a scenario that could stifle economic growth for years to come.
Debt Growth Under Buhari and Tinubu Administrations
When President Muhammadu Buhari took office in 2015, Nigeria’s total public debt was around ₦12.12 trillion ($63.8 billion). By the end of his tenure in 2023, this figure had surged to over ₦75 trillion. Both external and domestic debts increased significantly, with external debt rising from $10.3 billion to $41.6 billion and domestic debt climbing from ₦8.8 trillion to ₦44.91 trillion.
Since President Bola Tinubu’s inauguration in 2023, the debt trajectory has accelerated. By late 2024, Nigeria’s debt stood at ₦144.67 trillion ($94.23 billion), a nearly 50% increase within a year. The Tinubu administration sought parliamentary approval to borrow an additional $21.5 billion in external loans to fund economic reforms such as subsidy removals and currency devaluation. These measures, while aimed at stimulating growth, have intensified inflation and worsened the cost-of-living crisis.
A $2.25 billion World Bank loan was also secured to support these reforms and provide relief for vulnerable Nigerians. Despite these interventions, debt servicing remains a crushing burden on the national budget.
Borrowing, when used wisely, can support development. However, Nigeria lacks a diversified economy and a clear repayment plan. The country remains heavily dependent on oil revenues – subject to price volatility and declining global demand for fossil fuels. Meanwhile, the naira continues to depreciate, inflation remains high, and unemployment rates are alarming.
In this environment, accumulating debt without reform amounts to mortgaging Nigeria’s future. The risk of economic stagnation and social hardship looms large if current borrowing trends persist.
The National Assembly’s Role: Oversight or Rubber Stamp?
A critical but under-discussed factor in Nigeria’s debt crisis is the role of the National Assembly. Constitutionally empowered to approve borrowing, the legislature has often acted as a rubber stamp rather than a check on executive excesses. Loan requests are frequently approved with minimal scrutiny, debate, or demand for transparency.
Many lawmakers have neglected their duty to hold the executive accountable, some even benefiting from the system they should regulate. This has allowed unbridled borrowing without rigorous monitoring or audit of how funds are spent.
The National Assembly’s abdication has enabled the executive branch to accumulate debt unchecked, exacerbating the crisis.
The debt crisis is not just a fiscal issue but a social one. As debt servicing consumes the lion’s share of government revenue, spending on essential sectors like healthcare, education, and infrastructure is squeezed. States increasingly rely on federal bailouts, and the private sector struggles under heavy tax burdens and economic uncertainty.
This environment dampens economic growth, limits job creation, and deepens poverty. Ordinary Nigerians bear the brunt, facing rising inflation and worsening living conditions, especially the youth and vulnerable groups.
Addressing Nigeria’s debt challenge demands bold and honest reforms. The government must impose strict borrowing limits, ensuring every loan finances productive projects with clear economic returns. Revenue generation should be prioritized—not through excessive taxation but by expanding the tax base, promoting exports, and encouraging innovation.
Transparency and accountability must be enforced. Loan agreements should be publicly accessible, with regular audits and project monitoring to prevent misuse.
The National Assembly must reclaim its oversight role, scrutinizing loan requests and demanding detailed implementation and repayment plans. Lawmakers should prioritize national interest over partisan politics or personal gain.
Nigeria’s mounting debt is a crisis that goes beyond numbers – it is a moral and existential challenge. Without decisive action, the country risks being trapped in a cycle of debt dependency and economic decline.
The choices made today will determine Nigeria’s fiscal health and the well-being of generations to come. To avoid a bleak future, the country must embrace fiscal discipline, transparency, and economic diversification. Only then can Nigeria hope to break free from its growing debt burden and build a prosperous, inclusive economy for all its citizens.
