The Lagos Chamber of Commerce and Industry (LCCI) has expressed concern over Nigeria’s rising public debt profile, warning that the trend signals increasing fiscal pressure on the economy.
Nigeria’s total public debt climbed to N159.28tn as of December 31, 2025, representing an increase of N24.98tn or 18.6 per cent from the N134.30tn recorded in 2024.
According to the chamber, the continued increase in debt is largely driven by fresh borrowings to finance fiscal deficits, as well as the effect of exchange rate depreciation on the country’s external debt obligations.
The LCCI noted that Nigeria’s debt-to-GDP ratio rose moderately to about 41.5 per cent in the fourth quarter of 2025 from 40.87 per cent in the second quarter.
While the ratio remains within internationally acceptable thresholds, the chamber warned that the upward trend reflects growing fiscal vulnerabilities, especially as debt-service and debt-to-revenue ratios remain elevated.
The business advocacy group stated that rising debt obligations continue to put pressure on government finances and limit fiscal flexibility.
The chamber also referenced assessments by the World Bank, which linked Nigeria’s increasing debt burden to structural weaknesses in revenue generation and persistent spending pressures.
According to the LCCI, a possible oil revenue windfall in 2026 could provide temporary relief for government finances, but cautioned that such gains may not translate into long-term fiscal stability without disciplined management.
It noted that previous periods of high oil earnings have not consistently delivered sustainable improvements in the country’s fiscal position.
Data released by the Debt Management Office showed that domestic debt rose to N84.85tn at the end of 2025, reflecting a 3.7 per cent increase from the N81.82tn recorded in September.
The Federal Government accounted for N80.49tn, representing about 95 per cent of the total domestic debt stock, while state governments and the Federal Capital Territory held N4.36tn.
Domestic borrowings now account for 53.27 per cent of Nigeria’s total public debt, highlighting the government’s growing dependence on local financing.
On a year-on-year basis, domestic debt increased by N10.47tn or 14.1 per cent, driven largely by efforts to finance the 2026 budget deficit amid rising expenditure demands and weak revenue performance.
Economic analysts say the country may need stronger fiscal reforms, improved revenue mobilisation, and tighter expenditure controls to manage the growing debt burden sustainably.
