Nigeria’s public debt has climbed to ₦166.79 trillion, intensifying concerns about the country’s borrowing trajectory, rising repayment obligations and the resources available to fund critical public services.
The latest figures released by the Debt Management Office (DMO) show that the country’s total public debt increased by ₦7.44 trillion in three months, from ₦159.35 trillion at the end of March 2026 to ₦166.79 trillion as of June 30, 2026.
The increase represents a 4.7 per cent rise within the second quarter, while the debt stock grew by ₦14.39 trillion, or 9.4 per cent, compared with the ₦152.4 trillion recorded in June 2025.
The rising debt profile comes as the Federal Government continues to contend with competing demands for infrastructure investment, security, healthcare, education and other essential services.
Domestic borrowing accounts for larger share
According to the DMO, domestic debt accounted for ₦91.59 trillion, representing 54.91 per cent of the total public debt stock. External debt stood at ₦75.20 trillion, or 45.09 per cent.
The figures indicate that domestic borrowing remains the larger component of Nigeria’s debt portfolio, with the government relying substantially on funds raised within the country.
Federal Government obligations accounted for ₦152.77 trillion of the total debt stock, comprising ₦86.99 trillion in domestic debt and ₦65.77 trillion in external debt.
States and the Federal Capital Territory accounted for the remaining ₦14.01 trillion, made up of ₦4.59 trillion in domestic obligations and ₦9.42 trillion in external debt.
In dollar terms, Nigeria’s total public debt stood at $120.93 billion at the end of June 2026, compared with $99.66 billion a year earlier.
The DMO used an official exchange rate of approximately ₦1,379 to the dollar to calculate the naira equivalent of the external debt component.
Debt servicing puts pressure on revenue
Beyond the size of the debt stock, the cost of servicing existing obligations is emerging as a major concern for government finances.
Nigeria spent ₦5.28 trillion servicing domestic debt between January and June 2026, according to figures from the DMO reported by Punch.
The expenditure included ₦4.95 trillion in interest and rental payments, alongside ₦333.96 billion in principal repayments on promissory notes.
Federal Government bonds accounted for approximately ₦3.35 trillion in interest payments, while Nigerian Treasury Bills attracted another ₦1.49 trillion.
The figures illustrate how interest payments on government securities absorb substantial resources even before external debt-servicing obligations are considered.
Nigeria’s fiscal challenge is compounded by the gap between its financing needs and the revenue available to meet them.
A January 2026 economic outlook by Strategy& estimated that the Federal Government would spend ₦15.52 trillion on debt servicing in 2026, against projected revenue of ₦34.33 trillion.
The projection placed debt servicing at approximately 45.2 per cent of expected revenue, underscoring the pressure that repayment obligations could place on other spending priorities.
Every Nigerian’s share exceeds ₦700,000
The scale of the country’s obligations is also evident when the total debt is measured against its population.
Based on the DMO’s June 2026 debt figures and a World Bank population estimate of 237.53 million, Nigeria’s public debt translates to approximately ₦702,185 per person.
The calculation is an illustration of the national debt burden, not a personal bill owed by every Nigerian. Nevertheless, it highlights the scale of the liabilities accumulated by the country’s public institutions relative to its population.
The implications are particularly significant in an economy where households and businesses continue to face pressure from living costs, while the government must balance investment requirements against the cost of existing obligations.
Fresh borrowing raises sustainability questions
The debt debate has also intensified following President Bola Tinubu’s request for legislative approval for additional external borrowing to finance infrastructure and other development projects.
A report published on October 28 said the President was seeking approval for proposed foreign loans of $20.52 billion and €1.05 billion for the 2026–2027 period.
The proposal has renewed questions about the relationship between new borrowing, the productive use of borrowed funds and the government’s capacity to meet future repayment obligations.
Borrowing is not inherently unsustainable. Governments routinely obtain loans to finance infrastructure, support economic development and bridge revenue shortfalls.
The central issue, however, is whether the projects and investments financed by such loans generate sufficient economic and social returns to justify their cost.
For Nigeria, that question is particularly important because foreign-currency borrowing exposes public finances to exchange-rate movements, while domestic borrowing attracts interest costs that compete with other government spending.
A weaker naira can also increase the domestic-currency cost of servicing external obligations, even where the dollar value of the underlying debt remains unchanged.
Revenue growth remains critical
Nigeria’s expanding debt stock places renewed emphasis on the need to improve revenue generation, strengthen expenditure controls and ensure that borrowed funds deliver measurable results.
Stronger non-oil revenue collection, improved tax administration, more efficient management of public enterprises and reduced waste could help expand the resources available for debt servicing and development.
Equally important is transparency over borrowing agreements, the projects they finance, disbursements and repayment schedules.
Without stronger revenue performance, additional borrowing could leave the government with less fiscal room to respond to economic shocks or expand essential public services.
The government, on its part, has argued for reforms to the international financial system, citing high borrowing costs faced by African countries. In May 2026, Tinubu called for more affordable financing, arguing that expensive debt servicing diverts resources from infrastructure, healthcare, education and industrial development.
The challenge for Nigeria is therefore twofold: securing financing for development while ensuring that the cost of existing and future obligations remains manageable.
With public debt at ₦166.79 trillion as of June 2026 and domestic debt-servicing expenditure already running into trillions of naira in the first half of the year, the sustainability of the country’s borrowing strategy will increasingly depend on how effectively the government converts borrowed money into economic growth, stronger revenues and lasting public benefits.
