Fresh concerns have emerged over Nigeria’s rising debt profile as projections for 2026 indicate that the Federal Government may embark on new borrowings estimated at about ₦29 trillion.
The Nigerian Economic Summit Group, in the May 2026 edition of its Debt Burden Monitor released on Monday, warned that debt pressure remains significant despite signs of stability in some headline economic indicators.
The economic think-tank stated that Nigeria’s Debt Burden Index continued to signal elevated fiscal strain, reflecting persistent structural weaknesses within the country’s public finance system.
According to the report, Nigeria’s debt profile presents “a nuanced but concerning picture” as the economy transitions from 2024 into 2025.
“Headline indicators suggest a degree of stabilisation, yet underlying fiscal pressures remain elevated when assessed through a more comprehensive lens,” the NESG stated.
Providing historical context, the group explained that the Debt Burden Index declined to 70.9 points in 2024 from a peak of 83.6 points recorded in 2023.
The report noted, however, that the apparent improvement was largely driven by a temporary moderation in debt servicing pressures rather than any major strengthening of the country’s fiscal capacity.
“At face value, this suggests an easing of debt stress. However, this improvement was largely driven by a partial moderation in debt service pressures, rather than a fundamental strengthening of fiscal capacity,” the report stated.
NESG further observed that Nigeria’s public debt-to-GDP ratio rose sharply to 40.6 per cent in 2024, reflecting continued dependence on borrowing to finance budget deficits amid weak revenue generation.
“This divergence highlights a central issue that the underlying fiscal vulnerability remained significant,” the report added.
The think-tank also warned that the trajectory of the Debt Burden Index in 2025 reinforced concerns about the sustainability of Nigeria’s debt profile.
According to the report, quarterly estimates showed that the index remained elevated and volatile throughout the year, rising to 78.4 points in the first quarter of 2025 and peaking at 79.6 points in the second quarter before moderating slightly to 76.2 points in the third quarter and closing the year at an estimated 79.2 points in the fourth quarter.
“This pattern indicates that debt pressure has not structurally eased but instead fluctuating within a high-stress band,” NESG stated.
The organisation maintained that the transition between 2024 and 2025 does not yet indicate a decisive move toward debt sustainability.
“Overall, the 2024–2025 transition does not yet reflect a decisive shift toward debt sustainability. Rather, it signals a system making only marginal adjustments, with improvements in headline ratios masking persistent structural imbalances,” the report noted.
“The DBI captures this reality more effectively, signalling that Nigeria remains in a high-risk fiscal environment despite apparent stabilisation in conventional indicators.”
As of early 2026, Nigeria’s total public debt stood at ₦159.28 trillion, with external debt estimated at $51.86 billion as of December 31, 2025.
Economic analysts are projecting that the country’s debt stock could rise to between ₦180 trillion and ₦200 trillion in the medium term if current borrowing trends continue.
The Federal Government’s 2026 fiscal plan projects total expenditure of ₦68.32 trillion against estimated revenue of ₦36.87 trillion, leaving a deficit of more than ₦20 trillion expected to be financed largely through borrowing.
The revised borrowing plan of ₦29.2 trillion represents a sharp increase from the earlier projection of ₦17.89 trillion, further intensifying concerns over debt sustainability and fiscal stability.
Analysts have warned that rising debt obligations could worsen inflationary pressures, weaken the exchange rate, increase debt servicing costs and reduce credit available to the private sector.
Debt servicing obligations for 2026 are estimated at between ₦15.5 trillion and ₦15.9 trillion, underscoring growing pressure on public finances.
The concerns come amid ongoing debates over the country’s fiscal management, revenue generation capacity and the long-term sustainability of Nigeria’s borrowing strategy as the government continues efforts to fund infrastructure, economic reforms and social intervention programmes.
