What Nigeria’s Public Debt Looks Like in 2026 Amid Tax Reforms

By Zekeri Idakwo Laruba

Even as President Bola Ahmed Tinubu’s administration intensifies efforts to expand Nigeria’s revenue base through sweeping tax and fiscal reforms, the country’s public debt continues to climb. As of June 30, 2025, Nigeria’s total public debt stood at ₦152.4 trillion (approximately $99.66 billion), according to the latest figures released by the Debt Management Office (DMO).
This represents an increase of ₦3.01 trillion, or 2.01 per cent, from the ₦149.39 trillion recorded at the end of March 2025. The data confirms a sustained upward trajectory in Nigeria’s borrowing since President Tinubu assumed office in May 2023. Economic Confidential had earlier reported that Nigeria’s debt stock stood at ₦87.38 trillion in June 2023 before rising sharply to ₦149.39 trillion by March 2025—an increase of about 71 per cent in less than two years.
A major driver of this surge was the securitisation of ₦22.7 trillion in inherited Central Bank of Nigeria (CBN) Ways and Means Advances. While the move was widely praised for improving fiscal transparency, it immediately expanded the officially recognised debt stock, revealing the depth of Nigeria’s underlying fiscal pressures.
Between June 2023 and June 2025, Nigeria’s total public debt increased by more than ₦65 trillion, representing a 74 per cent rise in naira terms. This growth has been fuelled by fresh borrowings to finance budget deficits, infrastructure development, and economic reforms, alongside the sharp depreciation of the naira.
The exchange rate applied in the June 2025 DMO report was ₦1,529.21 to the US dollar, a steep fall from about ₦770/$ in mid-2023. This currency weakness has significantly inflated the naira value of Nigeria’s external debt, even where the dollar-denominated obligations have remained relatively stable.
A closer look at the debt composition shows that total external debt stood at $46.98 billion (₦71.85 trillion), accounting for 47.14 per cent of total public debt, up from $45.98 billion (₦70.63 trillion) in March 2025. Of this amount, the Federal Government accounted for $42.17 billion (₦64.65 trillion), while states and the Federal Capital Territory (FCT) held $4.81 billion (₦7.36 trillion).
Domestic debt, meanwhile, rose to ₦80.55 trillion ($52.67 billion), representing 52.86 per cent of the total, compared with ₦78.76 trillion in March. The Federal Government’s share of domestic debt stood at ₦76.59 trillion, while states and the FCT accounted for ₦3.96 trillion. Overall, the Federal Government controls about 92.6 per cent of Nigeria’s total public debt, with subnational governments holding just 7.4 per cent.
This near-parity between domestic and external debt marks a notable shift from June 2023, when domestic debt accounted for almost 62 per cent of the total. Analysts have expressed concern that Nigeria’s growing reliance on external borrowing increases exposure to exchange rate volatility and rising debt service costs. While foreign loans may offer relatively cheaper financing, they also heighten vulnerability to currency shocks that can sharply inflate repayment obligations in naira terms.
Debt servicing remains one of Nigeria’s most pressing fiscal challenges. In 2024, debt service reportedly consumed as much as 77.5 per cent of federal government revenues, leaving limited fiscal space for capital investment and social spending. Although the Tinubu administration insists that Nigeria’s debt remains within sustainable thresholds, critics argue that weak revenue growth, persistent inflation, and high interest rates continue to threaten long-term fiscal stability.
Central to the administration’s response is an ambitious tax reform agenda aimed at broadening the tax base, digitising tax administration, reviewing waivers, and strengthening enforcement through the Nigeria Revenue Service. While these measures are designed to reduce reliance on borrowing, their impact has so far been modest. Oil revenues remain volatile, and non-oil revenue growth has fallen short of expectations.
As the Tinubu administration moves deeper into its third year, Nigeria finds itself at a fiscal crossroads. High debt levels, a depreciating currency, inflationary pressures, and limited revenue options underscore the urgency of decisive and sustained policy action. As Economic Confidential observes, the early decision to securitise the CBN’s overdrafts may have improved transparency, but it also laid bare the scale of Nigeria’s fiscal strain.
The continued accumulation of debt—particularly at the federal level—raises critical questions about the balance between borrowing for development and the risk of sliding into a debt trap. With political activity already intensifying ahead of the 2027 general elections, Nigeria’s debt trajectory is set to remain a central issue in debates over economic policy, governance, and the country’s long-term financial future.

Zekeri Idakwo Laruba is Assistant Editor at Economic Confidential and a verified fact-checker. He can be reached via [email protected]