KEY POINTS
- NESG’s May 2026 Debt Burden Monitor said fiscal strain persists despite headline stability, with 2026 borrowing now projected at N29.2 trillion.
- The Debt Burden Index stayed elevated through 2025, peaking at 79.6 points in Q2 before closing at 79.2 in Q4.
- Total public debt stood at N159.28 trillion at end-2025, with analysts projecting a rise toward N180-N200 trillion in the medium term.
The Nigerian Economic Summit Group on Monday warned that Nigeria’s debt strain persists beneath surface stability, with the federal government’s 2026 borrowing plan now climbing to about N29.2 trillion against a backdrop of public debt that has already crossed N159 trillion.
NESG’s May 2026 Debt Burden Monitor said the Debt Burden Index continues to signal elevated fiscal pressure even as headline indicators appear to moderate, framing the 2024-to-2025 transition as a system making only marginal adjustments rather than a decisive shift toward sustainability.
Now the warning comes as the 2026 fiscal plan widens the gap between revenue and expenditure, leaving the Tinubu administration to plug a deficit of more than N20 trillion through fresh borrowing.
A nuanced but concerning picture
Specifically, NESG said headline indicators suggest a degree of stabilization, yet underlying fiscal pressures remain elevated when measured through a more comprehensive lens.
The Debt Burden Index fell to 70.9 points in 2024 from a 2023 peak of 83.6 points, but NESG said the improvement reflects a partial easing of debt service pressures rather than a fundamental strengthening of fiscal capacity.
Indeed, public debt-to-GDP rose sharply to 40.6 percent in 2024, reflecting continued reliance on borrowing to plug fiscal deficits and persistent revenue weaknesses.
Moreover, the 2025 DBI trajectory deepened the concerns. The index rose to 78.4 points in Q1 2025, peaked at 79.6 in Q2, moderated to 76.2 in Q3 and closed the year at an estimated 79.2 points in Q4.
Today, that pattern shows debt pressure fluctuating within a high-stress band rather than easing structurally. NESG said the DBI captures the reality more effectively than conventional indicators that mask persistent imbalances.
The 2026 squeeze
Furthermore, the federal government’s 2026 borrowing plan jumped to N29.2 trillion, far above the earlier projection of N17.89 trillion. Total 2026 expenditure now stands at N68.32 trillion against projected revenue of N36.87 trillion, leaving the widening deficit at the heart of the new debate.
Additionally, debt service for 2026 sits between N15.5 trillion and N15.9 trillion, an outlay that competes directly with capital spending, social investment and security funding.
Meanwhile, Nigeria’s total public debt stood at N159.28 trillion at the end of 2025, with external debt of $51.86 billion. Analysts say the figure could climb toward N180 trillion to N200 trillion over the medium term, depending on borrowing pace and naira movement.
Together, the rising stock and elevated service obligations are renewing concerns over debt sustainability, rising inflation, exchange-rate pressures and the possible squeeze on private-sector credit.
The deeper problem about Nigeria debt burden
The numbers point to the same diagnosis NESG has repeated for years: Nigeria does not yet have the revenue base to service the debt it is incurring. However, the 2025 Tax Reform Acts and a streak of stronger non-oil receipts have softened the pressure, even if the underlying gap remains structural.
NESG concluded that Nigeria remains in a high-risk fiscal environment despite apparent stabilization in conventional metrics.
Whether the Tinubu administration can hold borrowing closer to the lower end of the N17.8 trillion to N29.2 trillion range will determine how much fiscal flexibility the country retains for the rest of the year. Yet for now, the gap between Nigeria’s revenue ambitions and its spending commitments remains the central tension in the fiscal story.
