Nigeria’s public debt as a proportion of its economic output fell to 39.4% in the first quarter of 2025, thanks to a major revision in how the country calculates its Gross Domestic Product (GDP).
The National Bureau of Statistics (NBS) rebased GDP to include additional sectors such as digital services, fintech, and the creative economy, significantly boosting nominal GDP and, on paper, improving Nigeria’s debt profile.
According to data from the Debt Management Office (DMO), Nigeria’s public debt stood at ₦149.39 trillion as of March 31, 2025. This comprised ₦78.76 trillion in local debt and ₦70.63 trillion in foreign debt. The newly rebased GDP figure for the 12 months ending Q1 2025 was ₦379.17 trillion, bringing the debt-to-GDP ratio to 39.4%.
This ratio is slightly below the government’s 40% ceiling and well under the 55% red line set by global lenders like the World Bank and the IMF.
In breakdown terms, domestic debt now accounts for 20.77% of GDP, while external debt makes up 18.63%.
Before this recalibration, the economy’s size was estimated at ₦277.49 trillion, which placed the debt-to-GDP ratio at over 52%. With the new benchmark at ₦372.82 trillion for 2024, the ratio fell to 38.8%.
While the rebasing exercise offers a statistical boost to Nigeria’s debt sustainability outlook, it does not reduce actual debt levels or ease the growing cost of servicing obligations, especially given a weak naira and rising foreign debt costs.
Public debt increased by ₦27.72 trillion year-on-year from Q1 2024, reflecting a 22.8% surge, and rose ₦4.72 trillion, or 3.3%, from Q4 2024.
Analysts say the lower debt ratio could give policymakers some room to borrow for infrastructure and development, potentially improving Nigeria’s credit profile. However, fiscal consolidation and revenue generation remain crucial as Nigeria drafts its 2026–2028 Medium-Term Expenditure Framework (MTEF).
