Nigeria’s rising debt, projected to hit N187.79 trillion by the end of 2025, has raised alarm among economists and financial experts. The surge is attributed to factors such as policy-induced Naira depreciation, aggressive borrowing, and foreign currency volatility. The country’s debt-service-to-revenue ratio reached 162% in mid-2024, significantly straining government finances and diverting resources from critical capital expenditures. Analysts emphasize the urgency of addressing this trend to prevent a fiscal crisis.
Economic experts advocate for concessional borrowing loans offered at below-market rates with extended repayment periods as a strategic response to the debt burden. These loans, such as the $1 billion secured from the African Development Bank in 2024, can help minimize exposure to volatile interest rates and bridge the financing gap. Experts also highlight the importance of diversifying funding sources, leveraging Sovereign Sukuk for specific infrastructure projects, and enhancing transparency in loan utilization.
Structural reforms and revenue mobilization are critical to complement concessional borrowing. Experts argue that prudent debt management, reduced subsidy reliance, and reforms in key sectors, such as energy, will stabilize Nigeria’s fiscal profile and foster sustainable growth. Without these measures, the nation risks deepening its economic challenges amid a global landscape of rising borrowing costs.