As Nigeria’s public debt surges toward an unprecedented ₦187.8 trillion in 2025, the nation stands at a pivotal moment. The challenge is not just about managing numbers—it’s about remodeling the debt crisis into a catalyst for long-term, inclusive development. With fiscal pressures mounting and the cost of debt servicing now outpacing critical investments in health, education, and infrastructure, the call for a bold, strategic overhaul has never been louder.
Recent projections paint a stark picture: Nigeria’s debt has ballooned by over 1,000% in naira terms within a decade, driven by aggressive borrowing, currency depreciation, and persistent fiscal deficits.
As of late 2024, the Debt Management Office reported a debt stock of ₦142.3 trillion, with estimates suggesting this could soar past ₦155 trillion by year-end and ₦187.8 trillion in 2025.
The implications are profound—over 80% of government revenue is now consumed by debt servicing, leaving scant resources for essential services.
The United Nations has warned that such debt levels are forcing countries like Nigeria into painful trade-offs: “Instead of financing essential infrastructure, education, and healthcare, rising debt burdens are forcing governments into difficult decisions,” noted UNCTAD Secretary-General Rebeca Grynspan at the 14th International Debt Management Conference.
The human cost is clear: “Debt burden is a system that allows creditors to get paid while children go hungry, schools remain closed, and hospitals are starved of medicine and staff,” said Fr. Charlie Chilufya, S.J., a leading advocate for global justice.
Expert Voices and Urgent Warnings
Financial experts warn of a looming debt trap, where new loans are taken simply to service existing obligations—raising the specter of sovereign default if unchecked borrowing persists.
“We are already in a debt trap, borrowing new funds to pay old debts. If the federal government doesn’t de-leverage soon, insolvency could be imminent,” cautioned David Adonri, Vice Chairman at Highcap Securities. Economist Paul Alaje echoed this, stating, “By the end of 2025, if urgent decisions are not made, Nigeria may have to borrow just to service its debt”.
A Blueprint for Transformation
Despite these daunting figures, there is a growing consensus among economists and development experts that Nigeria’s debt crisis can be remodeled into an engine for growth—if the right reforms are enacted. Key strategies include:
Strict Fiscal Discipline: Enforce and strengthen regulations like the Fiscal Responsibility Act, ensuring borrowing is tied only to productive investments and not recurrent expenditure.
Transparent Debt Auditing: Every naira borrowed must be tracked and justified by tangible development outcomes.
Revenue Diversification: Move beyond oil dependency by harnessing agriculture, technology, and creative industries.
Smart Borrowing: Prioritize concessional loans with favorable terms and ensure all debt is linked to infrastructure, education, or technology projects that yield measurable returns.
Public-Private Partnerships: Leverage private investment for nation-building, reducing the direct burden on public finances.
Asset Sales and Balance Sheet Restructuring: Consider the sale of non-strategic assets to repay debts and improve Nigeria’s international credit rating.
Quote of the Day:
“There is growing consensus among experts that the current debt system serves financial markets—not people. This threatens to condemn entire nations to a lost decade, or worse. Now is the time for responsible action.”
— Professor Joseph Stiglitz, Nobel Laureate and co-leader of the Jubilee 2025 Commission
As Nigeria navigates this critical juncture, the nation’s leaders face a stark choice: continue down the path of unsustainable borrowing, or embrace a new paradigm that transforms debt into a foundation for prosperity. The world is watching, and the stakes could not be higher. “Debt doesn’t have to be a dead end,” insists financial analyst Tunde Balogun. “With the right policies, it can become the engine that drives Nigeria’s long-term prosperity.” The time to act is now—Nigeria’s economic renaissance depends on it.
