Nigeria Debt Risk Remains High Despite Temporary Relief, NESG Warns on Rising Fiscal Pressure

The Nigerian Economic Summit Group (NESG) has raised fresh concerns over Nigeria’s fiscal health, warning that the country remains exposed to a high debt risk environment despite short-term improvements in some debt indicators. In its latest Debt Burden Monitor report, the group said structural weaknesses, rising repayment obligations, and heavy reliance on borrowing continue to strain the economy.

According to the report, Nigeria’s Debt Burden Index (DBI) dropped from 83.6 points in 2023 to 70.9 points in 2024, suggesting a slight easing of pressure. However, the NESG stressed that this improvement does not reflect real fiscal strength, but rather a temporary reduction in debt servicing pressure rather than meaningful economic reform.

The think tank further highlighted a troubling contrast: while the DBI declined, Nigeria’s debt-to-GDP ratio climbed to 40.6 per cent in 2024. This divergence, it said, signals that the country’s overall fiscal vulnerability is still deepening as government borrowing continues to rise faster than revenue growth.

Looking at 2025 projections, the NESG noted that debt pressure remained consistently high throughout the year, fluctuating between 76.2 and 79.6 points. It described this pattern as evidence that Nigeria’s debt challenges have not structurally improved, but are instead cycling within a sustained high-stress range.

The group warned that weak revenue mobilisation, persistent fiscal deficits, and rising debt servicing costs—now worsened by increasing domestic interest payments—could further destabilize public finances. With total public debt reaching N159.28 trillion and debt service rising to about N16 trillion, NESG urged urgent reforms to prevent long-term economic strain and protect critical spending on infrastructure and social services.

source: The Guardian