FG owes 95% of Nigeria’s domestic debt

…States, FCT account for 5%

From Adanna Nnamani, Abuja

Nigeria’s rising debt burden is becoming increasingly concentrated at the centre, with the federal government now accounting for more than half of the country’s total public debt through domestic borrowing alone.

Fresh figures from the Debt Management Office (DMO) show that as at September 30, 2025, Federal Government domestic debt represents 50.76 per cent of Nigeria’s entire public debt stock, reflecting the growing dominance of Abuja in the nation’s borrowing profile.

The DMO data puts Nigeria’s total public debt at N153.29 trillion as of September 2025. Of this amount, domestic debt accounts for N81.82 trillion, representing 53.37 per cent of the total portfolio, while external debt stands at N71.48 trillion, or 46.63 per cent.

However, what stands out most in the breakdown is the overwhelming share of the federal government within the domestic component. Out of the N81.82 trillion domestic debt, the federal government alone owes N77.81 trillion, leaving states and the Federal Capital Territory with a combined domestic debt of just about N4 trillion.

In share terms, the federal government accounts for about 95 per cent of total domestic debts, while the states and FCT account for roughly 5 per cent.

A year-on-year comparison shows that the country’s debt stock has expanded significantly. In September 2024, Nigeria’s total public debt stood at N142.32 trillion. Within one year, this figure climbed by nearly N11 trillion to N153.29 trillion.

Domestic debt also rose sharply over the same period, increasing from N73.43 trillion in 2024 to N81.82 trillion in 2025. More notably, the gederal government’s domestic debt grew from N69.22 trillion, which then represented 48.64 per cent of total debt, to N77.81 trillion, pushing its share up to 50.76 per cent. This shift signals a deepening reliance on domestic borrowing at the federal level.

While federal domestic debt surged both in value and in share, the proportion attributable to states and the FCT declined slightly from 2.96 per cent in 2024 to 2.61 per cent in 2025.

This suggests that subnational governments have either slowed their pace of borrowing or have not expanded their debt exposure at the same rate as the federal government.

Analysts say this may be due to stricter borrowing controls, revenue constraints, or limited access to the domestic capital market.

External debt has also risen within the period under review. Nigeria’s total external debt increased from $43.03 billion in September 2024 to $48.46 billion in September 2025, reflecting an addition of over $5 billion in dollar obligations. In naira terms, the external debt moved from N68.89 trillion to N71.48 trillion, influenced partly by the exchange rates used by the DMO for conversion.

Although domestic debt remains the larger portion of the overall portfolio, the steady increase in external borrowing adds another layer of fiscal pressure.

Economic analysts warn that the growing concentration of debt at the federal level could have wider implications for fiscal sustainability. Rising domestic borrowing may crowd out private sector access to credit, push up interest rates, and increase the cost of servicing debt. With debt servicing already consuming a significant portion of federal revenues, concerns persist about the shrinking fiscal space available for capital projects, social investments and economic development initiatives.

The latest figures reinforce the reality that Nigeria’s debt challenge is increasingly a federal burden. As the Federal Government carries over half of the nation’s total debt through domestic obligations alone, attention is shifting to how effectively borrowed funds are being deployed and whether revenue generation can keep pace with mounting liabilities.

Without stronger fiscal reforms and improved revenue performance, experts caution that the current trajectory may heighten long-term sustainability risks for the nation.