Nigeria’s outstanding promissory notes declined by 15.6% in the first quarter of 2025, according to the Debt Management Office (DMO). The total fell from ₦1.542 trillion in December 2024 to ₦1.301 trillion in March 2025, highlighting the federal government’s drive to settle verified financial obligations. This also marks a 17.1% year-on-year reduction, reflecting renewed fiscal discipline aimed at restoring confidence among contractors, investors, and key economic stakeholders.
The Office of the Accountant General of the Federation confirmed that efforts are ongoing to pay contractors who have completed verified projects across Ministries, Departments, and Agencies (MDAs). This aligns with recent government announcements to improve public trust and uphold value-for-money standards. However, concerns linger from earlier in the year, when the government faced difficulty redeeming maturing promissory notes due to the Central Bank of Nigeria’s refusal to grant overdraft facilities.
DMO Director-General Patience Oniha explained that Nigeria’s rising debt burden is driven by consistent borrowing without matching revenue growth. She emphasized that while borrowing is necessary for development, the continued issuance of promissory notes without adequate financial backing exacerbates the country’s fiscal vulnerabilities. Oniha warned that servicing an increasing debt stock without proportional revenue could become unsustainable.
The DMO also revealed that Nigeria’s domestic debt rose to ₦78.76 trillion by March 2025, up from ₦74.38 trillion in December 2024. The quarterly increase of ₦4.38 trillion adds to the 20% year-on-year surge, driven largely by the issuance of more FGN bonds, Treasury Bills, and FGN savings bonds. Sukuk and Green Bonds remained stable, but the rising volume of local debt continues to strain government finances.
Nigeria’s external debt climbed to ₦70.63 trillion as of March 2025, up 26.1% from ₦56.02 trillion a year earlier. The modest 0.5% quarterly rise masks deeper challenges, as much of the external borrowing is denominated in foreign currencies while the naira continues to weaken. With the government owing significant sums to multilateral lenders and Eurobond holders, the cost of debt servicing in local currency terms is mounting, potentially undermining fiscal reforms and macroeconomic stability.
Source: Nairametrics