By Oluseye Ojo and Adanna Nnamani

This is because Nigeria’s debt stock has consistently been on the upward trajectory amid local crises and global headwinds that continue to jolt the economy and retard the revenue generation momentum.

Investigations by Saturday Sun reveal that between January 2020 and December 2024, Nigeria spent over N16.7 trillion on domestic debt servicing, just as external loan repayments gulped over $14.3 billion.

The figures were arrived at after analysing reports of the country’s domestic and external debts published on the website of Debt Management Office (DMO).

According to the agency, the public debt profile of Nigeria as of December 31, 2024, stood at N144.67 trillion, representing a 48.58 per cent increase compared to N97.34 trillion recorded at the end of December 2023.

Investigation further showed that the total public debt stock as of December 31, 2020 was approximately N32.915 trillion ($86.34 billion, using the N381/$1 2020 exchange rates for estimation purposes). However, the breakdown of the 2024 public debt of Nigeria showed that external debt was N70.29 trillion, while domestic debt was N74.38 trillion.

Also, in 2023, the external debt stood at N38.22 trillion and domestic debt at N59.12 trillion, making a total of N97.34 trillion.

Further analysis showed that from January to December, 2024, Nigeria spent about N5.87 trillion on servicing of domestic debt, and about $4.66 billion to service external debt.

In 2023, servicing of domestic debt gulped over N4.38 trillion, while that of external obligations was over $3.5 billion.

In 2022, over N2.56 trillion was expended on domestic debt servicing and $2.41 billion on external debt servicing. The government, in 2021, used over N2.05 trillion to service domestic debt and $2.11 billion on external loans. More so, N1.85 trillion was spent on servicing domestic debt in 2020, and $1.56 billion spent on external debt.

Summarily, external debt servicing between 2020 and 2024, when totalled, stands at approximately $14.3 billion.

For the domestic debt servicing, the total is N16.72 trillion.

A breakdown shows; N5.870 trillion in 2024, N4.381 trillion in 2023, N2.560 trillion in 2022, N2.054 trillion in 2021 and N1.854 trillion in 2020.

It was further gathered from the DMO that in 2024, the indebtedness of Nigeria to multilateral organisations was $22.316 billion.  The multilateral organisations include the International Monetary Fund (IMF), World Bank, African Development Bank (AfDB), Arab Bank for Economic Development in Africa, European Development Fund, Islamic Development Bank, and International Fund for Agricultural Development.

In the bilateral category, the 2024 external debt to China, France, Japan, India, and Germany was put by the DMO at $6,090.46 billion. Then, Eurobonds were put at $17,318.85 million while the debt stock to Deutsche Bank AG was $54.87 million.

Investigation also revealed that in the period from 2020 to 2024, Nigeria primarily relied on loans from the IMF and the World Bank to manage its economic challenges, particularly those arising from the COVID-19 pandemic and falling oil prices.

The key loans are IMF’s Rapid Financing Instrument (RFI), and World Bank Loans. Nigeria obtained a $3.4 billion loan under the RFI in 2020 to mitigate the economic impact of the pandemic and falling oil prices.

This loan was fully repaid by the President Bola Tinubu administration on April 30, 2025.

Also, the World Bank approved a $1.08 billion loan for Nigeria in 2025 to support education, community resilience, and nutrition.

Besides the IMF and World Bank facilities, Nigeria also secured loans from other sources, including China, for specific infrastructure projects.  The Chinese loans were used to fund projects like the Idu-Kaduna rail line, Abuja Light Rail and airport expansion projects.

But there has not been an official report from DMO on the actual domestic and external debt of Nigeria in the first quarter of 2025.

Reports indicate that the IMF loan repayment has demonstrated Nigeria’s fiscal sustainability and debt management capabilities, especially given the recent increase in external debt.

As gathered, the World Bank loans, usually long tenor, are intended to address specific development challenges and improve the lives of underserved populations. It was further stated that infrastructure projects funded by loans from China are aimed at boosting economic growth and development.

Further findings also revealed that the domestic debt of state governments and the Federal Capital Territory (FCT) in Nigeria has seen a significant decline. The total domestic debt of the 36 states and FCT was put at N3.97 trillion as of December 2024), down from N5.82 trillion in June 2023, representing a 32.27 per cent decrease.

At the sub-national level, records show that 33 states and the FCT have repaid N1.85 trillion in domestic debt, due to increased revenue allocations from the federal government.

Top on the list of states that have cut down their debts are Delta, Jigawa and Ondo. Delta State has reduced debt by over 50 per cent, repaying N265.83 billion out of N465.4 billion. Also, Jigawa State cut its debt profile by 96 per cent by repaying N41.8billion out of N43.13 billion. Ondo State also reduced its debt by 82 per cent, paying off N61.6 million out of N74 billion.

The documents stated that three states borrowed more and have failed to reduce their debt profiles. One of the states is in the South East, the second in South South and the third in the North Central

It was further gathered that the external debt of states and FCT increased from N3.35 trillion to N7.37 trillion between June 2023 and December 2024. The aggregate perspective of critical stakeholders reveal  that Nigeria’s borrowing strategy from 2020 to 2024 focused on addressing the economic fallout of the COVID-19 pandemic, stabilising the economy and supporting specific development projects.

Meanwhile, economists have warned that the country’s rising debt servicing obligations pose serious risks to economic sustainability, fiscal health and investment in critical sectors.

Commenting on the development, the Director General, Centre for the Development of Private Enterprise (CPPE), Dr Muda Yusuf said Nigeria’s debts are getting to thresholds that raise genuine sustainability concerns.

“Our debts are getting to ratios that raise sustainability concerns. It’s higher than what is used to do capital projects.

“There is also the issue of repayment costs. The interest rates of some loans are as high as 20% or even higher. Euro Bond interest rates are high and cost of servicing them very high as well.

“Debt utilisation also matters. As we borrow, we should monitor and ensure the capacity to pay back is there. We must not spend anyhow. Even if you don’t account for it, you must pay back, whether local or foreign debt. We must stick to these rules to avoid getting into a debt trap”, he stated.

Proffering solutions, Dr Yusuf called for fiscal discipline and monetary intelligence to raise more revenue without unnecessarily choking the vulnerable population.

He described the tax reform initiative as a great step that will help to boost revenue and achieve fiscal consolidation to get Nigeria’s revenue close to our expenditure threshold.

“We have another area, oil and gas, that is attracting more investment and boosting production and all that. We need to up the ante.

“Thankfully, we have a new team at NNPC Ltd to drive these projects to have close to what obtains in other oil jurisdictions.

“We also need to cut expenditure to ensure, so we reduce fiscal deficit and reduce borrowing and take off pressure on the economy.  Debt repayment is a first line charge. Before you do anything, you must repay your debt.

Also commenting, an economic and development expert, Mr Aliyu Ilias, said the heavy debt burden was eating deep into funds that should be allocated to essential infrastructure and public services.

He observed that the imbalance is evident in Nigeria’s national budgets, where allocations for debt servicing consistently overshadow capital expenditure. Ilias urged the government to explore more sustainable debt management strategies, such as restructuring or debt buyback mechanisms, to unlock resources for critical development initiatives.

“The challenge is that if you are expending such amounts on debt servicing, it will erode capital projects. And that simply means that instead of using the money to invest in capital research, such as social infrastructure like roads, the health sector, or investments in education, it will not happen. They will divert the funds to service debt and that is the challenge of debt servicing.

“Even if you look at our budgets, debt servicing is almost more than the capital expenditure. And capital expenditure is what Nigerians would benefit from. That’s part of the challenge of our development in Nigeria. So, it is a bad situation that the government must find a way to cope with.”

In his remarks, another economist and a former consultant to the United Nations Development Programme (UNDP), Dr. Samson Olalere, in an interview with Saturday Sun, expressed concern about Nigeria’s mounting external and domestic debts.

He took a swipe at some past administrations in the country for mismanaging loans they obtained, which he said have crippling effects on the economy.

He said it was disheartening that borrowed funds failed to bolster growth sectors.

“It’s quite unfortunate that we continue to accumulate external debts that have also led to internal debts. This will definitely have a negative effect on the economy. The reason being that in the past, most of these monies owed were not deployed to what they were borrowed for.

“Since Obasanjo’s era when loans were forgiven, we have borrowed so much again. We cannot point to many things that we have done with that money. And that’s why you see that the thing is escalating.

“You cannot but service the loan by paying it in interest, because there are sanctions attached to the loans. So, they keep servicing. By the time you cumulate the servicing of the loan, it’s even more than the capital that you have borrowed, because we did not deploy to the right sector. So, that’s the problem. Unfortunately, the thing is having serious effects on the economy.

“It is difficult for us not to borrow money. If we borrow money, let’s deploy it to the sector of the economy that can be productive and yield revenue that can pay off the loan. Once the loan is paid off, what we used the money for will still be there to be bringing revenue to the country. So the problem we have is that loans and the funds now have not been rightly deployed.

“Recently, we discovered that this particular government has been able to offset the loan that we got from the IMF during the COVID-19 era. If we have governments in place that are serious about doing this kind of a thing, we might easily get out of the dungeon that we find ourselves in now. The money borrowed should be deployed to where it will yield revenue that can pay off.”