Nigeria’s public debt-to-GDP ratio has fallen to 39.4% in the first quarter of 2025 following a comprehensive rebasing exercise by the National Bureau of Statistics. The upward revision of the country’s economic output now places Nigeria comfortably below its self-imposed threshold of 40%, offering a more favorable perspective on fiscal resilience.
As at March 31, 2025, the Debt Management Office reported a total public debt of ₦149.39 trillion, comprising ₦78.76 trillion in domestic obligations and ₦70.63 trillion in external borrowing. However, thanks to the GDP rebasing, which integrates emerging sectors such as digital services, fintech, creative industries, and the informal sector, nominal GDP has been adjusted to ₦379.17 trillion, thereby reducing the relative debt burden.
Prior to rebasing, the GDP estimate stood at ₦277.5 trillion, which placed the debt load at approximately 52%. The revised figure marks a significant recalibration, lowering the ratio not only against prior estimates but also aligning with prudent fiscal policy.
Further analysis places domestic debt at 20.77% of GDP, with external debt contributing 18.63%, keeping the combined debt well within the government’s benchmark. The new ratio is also comfortably below the 55% limit recommended by international financial institutions.
Despite the improved ratio, Nigeria’s debt profile remains a point of concern. The country’s public debt stock rose by 22.8% year-on-year, driven by consistent borrowing and the impact of naira depreciation. Such growth means that while debt appears more manageable on paper, the underlying obligations and debt-servicing costs continue to climb.
Policy experts argue that while the rebasing offers short-term fiscal relief, it does not eliminate debt or its associated servicing demands. Any benefits from the lowered ratio will only translate into long-term stability if backed by disciplined spending, enhanced revenue generation, and ongoing structural reforms.
Looking ahead, the revised figures are likely to influence Nigeria’s Medium-Term Expenditure Framework (2026–2028). A lower debt-to-GDP ratio provides greater flexibility for borrowing to fund capital projects and economic stimulus, potentially improving the country’s credit rating. However, experts caution that this should be balanced against the persistent need to rein in borrowing and expand revenue sources.
As Nigeria navigates the post-rebasing landscape, the challenge lies in leveraging the improved debt metrics into real fiscal progress—ensuring that statistical gains translate into stronger public finances and lower long-term risks.
