Nigeria’s total public debt has risen to N159.27 trillion, representing a N14.6 trillion increase in one year, as the federal and state governments continue to borrow to finance infrastructure, public services and other government programmes.

The latest figures from the Debt Management Office (DMO) show that the country’s debt stock increased from N144.67 trillion in December 2024 to N159.27 trillion as of December 31, 2025.

The increase represents a 10.1 per cent rise in 12 months.

The debt stock also rose by N5.98 trillion from the N153.29 trillion recorded at the end of September 2025.

The latest figure covers the domestic and external obligations of the Federal Government, the 36 states and the Federal Capital Territory.

Of the N159.27 trillion total, N84.84 trillion is domestic debt, while N74.42 trillion is external debt.

Domestic borrowing drives increase

Domestic debt accounted for more than half of Nigeria’s total public debt after rising by N10.47 trillion, from N74.38 trillion in December 2024 to N84.84 trillion at the end of 2025.

That represents a 14.1 per cent increase during the period.

External debt also increased from N70.29 trillion to N74.42 trillion, representing a rise of about N4.14 trillion.

The increase in the naira value of external debt is partly influenced by exchange-rate movements, as a significant portion of Nigeria’s foreign obligations is denominated in foreign currencies.

States add to debt burden

The 36 states and the FCT also recorded an increase in their combined domestic debt.

According to the DMO, their domestic debt rose from N3.97 trillion in December 2024 to N4.36 trillion by the end of 2025.

Lagos State recorded the largest increase, followed by the Federal Capital Territory and Kaduna State. However, some states reduced their debt during the period, reflecting differences in borrowing and repayment patterns across the country.

Revenue remains a major concern

The rising debt stock has renewed concerns over Nigeria’s ability to generate sufficient revenue to service its growing obligations while still funding critical sectors.

Borrowing is not necessarily problematic when loans are invested in productive projects that create jobs, expand economic activity and generate sufficient revenue to support repayment.

The greater concern is borrowing to finance recurrent expenditure at a time when government revenue remains relatively low.

Nigeria has historically struggled with weak revenue mobilisation compared with the size of its economy.

The World Bank’s Nigeria Country Director, Mathew Verghis, previously captured the challenge by saying: “Nigeria doesn’t have a high indebtedness problem, it has a low revenue problem.”

The argument is that stronger domestic revenue mobilisation would give the government greater fiscal space to service its debts without significantly reducing spending on essential services.

FG defends borrowing

The administration of President Bola Tinubu has continued to defend borrowing as necessary to finance infrastructure and other investments expected to support economic growth.

The Federal Government has also sought legislative approval for additional external borrowing to fund infrastructure and other government programmes.

However, analysts and fiscal experts have continued to stress that the key issue is not simply how much the government borrows, but how the borrowed funds are spent and whether they generate sufficient economic returns.

With Nigeria’s public debt now standing at N159.27 trillion, pressure is mounting on the government to strengthen revenue collection, reduce waste and ensure that borrowed funds are channelled into projects capable of generating long-term economic value.

For Nigerians, the rising debt stock has direct implications because government loans are ultimately repaid from public revenue.

As debt and debt-servicing obligations increase, a larger share of government income could be committed to repaying existing loans, potentially leaving fewer resources for roads, schools, healthcare, security and other essential public services.

The challenge for the government, therefore, is to strike a balance between borrowing to support economic development and maintaining a sustainable debt position.

Ultimately, Nigeria’s debt burden will depend not only on the amount the government borrows, but on whether those loans translate into stronger economic growth, higher revenue and productive investments capable of making future repayment more manageable.