FG debt burden hits record highs, says report

Nigeria’s debt stress has reached its highest level on record, according to findings from the new Debt Burden Index, a composite metric designed to capture the country’s true fiscal pressure.

The report, released by the Nigerian Economic Summit Group during its annual conference in Abuja, revealed that between 2020 and 2023, Nigeria’s index peaked at 83.6 points, reflecting the severe strain from pandemic-era borrowing, collapsing revenues, and debt service costs that exceeded total government revenue.

According to the report, Nigeria’s debt architecture has become structurally fragile and fiscally draining, highlighting the urgent need for reform.

Nigeria had spent $2.86 bn servicing external debt, slightly lower than the $3.06 bn spent in the same period in 2024. This figure represents 69.1 per cent of the country’s total foreign payments of $4.14 bn during the review period.

The Tentative Reversal phase in 2024–2025 showed mild easing to 70.9 points, estimated at 69.0 in the first quarter of 2025, helped by fuel subsidy removal and foreign exchange reforms, though fiscal strain remains acute.

The report noted that the index provides a more accurate picture of fiscal stress than the traditional debt-to-Gross Domestic Product ratio, as it integrates solvency, liquidity, and revenue capacity into a single measure.

“Nigeria stands at a critical juncture in its fiscal affairs,” the analysis stated. “While public debt metrics appear moderate by global standards, the index presents a more sobering reality, one of structural fragility and fiscal exhaustion driven by weak revenue mobilisation, rigid debt service obligations, and exposure to foreign exchange-sensitive liabilities.”