Nigeria’s public debt-to-GDP ratio has dropped to 39.4% in Q1 2025, following the rebasing of the country’s Gross Domestic Product (GDP) by the National Bureau of Statistics (NBS). The rebasing updated the GDP base year from 2010 to 2019, expanding the economic measurement to better capture sectors like fintech, digital services, creative industries, and the informal economy. This revaluation has given the country improved fiscal indicators, though public debt still remains substantial at ₦149.39 trillion.
With the new GDP figure at ₦379.17 trillion—covering Q2 2024 to Q1 2025—the debt burden now stands just below the 40% limit set by the Federal Government, and well under the 55% ceiling advised by the World Bank and IMF. Of the total debt, ₦78.76tn is domestic and ₦70.63tn external, making up 20.77% and 18.63% of GDP respectively. The current ratio marks a modest rise from 38.8% at the end of 2024, largely due to continued borrowing.
Before the rebasing, Nigeria’s GDP was estimated at ₦277.49tn, putting the debt-to-GDP ratio at 52.13% in late 2024. Post-rebasing, the GDP figure was revised up to ₦372.82tn, reducing the ratio to 38.8%. Despite the numerical improvements, the underlying debt volume continues to rise, with year-on-year debt increasing by ₦27.72tn (22.8%), partly due to currency depreciation which inflated the naira value of external debt.
While rebasing offers fiscal breathing space, analysts warn that it does not reduce the actual burden of debt servicing, especially in a context of revenue shortfalls and exchange rate volatility. The illusion of improved indicators could mask the growing difficulty in managing obligations unless structural reforms and revenue mobilization improve.
In dollar terms, the rebasing has increased Nigeria’s economy size by roughly $64bn, though the country remains Africa’s fourth-largest economy behind South Africa, Egypt, and Algeria. This stands in contrast to the 2014 rebasing, which briefly positioned Nigeria as the continent’s largest economy. The latest rebasing reflects not only Nigeria’s evolving economy but also highlights how peer African nations have also grown—underscoring the need for stable policy and diversified growth to reclaim economic leadership.
Source: Punch