Nigeria’s debt crisis is deepening, with original figures showing a troubling rise of ₦4.72 trillion in fair the first quarter of 2025. This brings the nation’s total national debt to a staggering ₦149.38 trillion, up from ₦144.67 trillion recorded at the stop of 2024.
Behind the numbers lies a worrying trend: consistent borrowing to possess funds gaps, worsened by the declining worth of the naira.
At the heart of this rise is the growing worth of external loans. While Nigeria’s external debt handiest grew modestly in greenback phrases adding about $3.86 billion the weakening naira meant that the local worth of that debt ballooned.
The external debt now stands at ₦70.63 trillion, a great deal inflated by commerce price volatility, no longer fair original borrowing.
The legitimate commerce price frail by the Central Financial institution in early 2024 was ₦1,330.26 to $1, and although the Q1 2025 price hasn’t been released, the widening hole between naira and greenback values suggests the local forex has continued to weaken.
As the naira depreciates, Nigeria pays more in local forex for the same quantity of buck debt.
In the interim, home debt is furthermore on the rise, now totaling ₦78.75 trillion. This skill Nigeria’s borrowing is coming from each overseas creditors maintain the World Financial institution and Eurobond holders, as neatly as from within its possess financial machine.
The rising debt is no longer only a macroeconomic statistic, it’s beginning to hit home. Nigeria’s per capita debt has now crossed ₦600,000, raising excessive questions about sustainability.
As more of the nation’s income goes into debt servicing, there’s much less left for healthcare, training, infrastructure, and other pressing trend wants.
Valuable of the borrowing has been justified as valuable to bridge funds deficits or fund capital tasks. Nonetheless with the naira in decline and revenue generation silent shaky, the burden of compensation is becoming heavier.
Critics argue that except Nigeria reforms its borrowing practices and strengthens its financial system, the nation is at risk of be headed for a deeper financial crunch.
