Nigeria’s Domestic Debt Hits N6.17 Trillion in Six Months as FG Seeks to Bridge Budget Deficit
The Federal Government of Nigeria (FG) has borrowed a total of N6.17 trillion from the domestic debt market within the first six months of 2025, according to data from the Debt Management Office (DMO). These borrowings, raised through Federal Government Bonds (FGN Bonds), Nigerian Treasury Bills (NTBs), and Promissory Notes, form part of the country’s broader domestic debt strategy, highlighting the government’s reliance on internal funding amid revenue shortfalls.
Analysis of DMO figures shows that FGN Bonds remain the backbone of Nigeria’s domestic debt, accounting for nearly 80% of total borrowings. By June 2025, the stock of FGN Bonds stood at N60.65 trillion, split across Naira-denominated bonds, securitized Ways and Means Advances, and USD-denominated bonds. Treasury Bills contributed N12.76 trillion, while other instruments, including Sukuk, Green Bonds, Savings Bonds, and Promissory Notes, diversified the debt portfolio to meet the needs of different investors and manage short-term liquidity.
The surge in domestic borrowing underscores the government’s fiscal strain, with oil production remaining below the 1.8 million barrels per day benchmark and non-oil revenue underperforming. Total domestic debt rose from N74.89 trillion at the end of Q1 2025 to N76.59 trillion by June, while overall public debt increased to N152.4 trillion, with domestic obligations accounting for 52.9% and external debt at 47.1%. Analysts note that despite rising borrowing costs, investor confidence in sovereign instruments remains strong.
Nigeria’s expanding debt pile raises concerns about fiscal sustainability and rising debt servicing costs, which already consume a significant portion of government revenue. With total public debt projected to reach N152.11 trillion by year-end, policymakers face pressure to balance short-term fiscal stimulus with long-term stability. Rising yields on FGN Bonds, averaging between 18% and 21%, combined with high inflation at 23%, highlight the urgency of strategic debt management and prudent fiscal planning.
Preliminary estimates suggest that the government may have borrowed an additional N3 trillion, potentially bringing domestic debt in 2025 close to N9 trillion. Experts emphasize that borrowing is sustainable if the funds are used productively to stimulate growth, create jobs, and generate future revenues. Mr. Charles Fakrogha, MD/CEO of Maxfund Africa, noted that “there is no problem with borrowing if borrowed funds are properly utilized,” stressing that ongoing infrastructure projects and reforms could boost economic growth and justify the government’s debt strategy.
source: nairametrics