Financial analysts at Afrinvest have called for urgent measures to address Nigeria’s growing debt burden, warning that delays could worsen the situation. This was highlighted in their latest macroeconomic report, Nigeria’s Debt Statistics, High Risk or Not?, following the recent visit of IMF’s First Deputy Managing Director, Gita Gopinath.
During her visit, Gopinath described Nigeria’s debt level as “moderate” rather than “high risk.” However, she cautioned that 75% of government revenue is spent on debt servicing, leaving little for social and economic development. She stressed the need for stronger tax collection, reduced financial leakages and disciplined spending to prevent the debt from becoming unsustainable.
Afrinvest analysts, while agreeing with the IMF’s long-term recommendations, argued that immediate intervention is needed. They pointed to the Debt Management Office’s (DMO) latest report, which shows Nigeria’s total public debt reaching N142.3 trillion, the highest ever recorded due to a widening budget deficit and currency depreciation. Domestic debt rose by 3.3% in Q3 2024, while external debt increased by 9.2%, driven by the naira’s continued decline.
The debt-to-GDP ratio now stands at 52.8%, exceeding the government’s target of 40% and nearing the 55% risk threshold for developing nations. Amid concerns over high debt servicing in the 2025 budget, Minister of Budget and Economic Planning, Atiku Bagudu, expressed optimism that improving economic conditions could ease the burden.
Meanwhile, economic analyst Jimi Ogbobine of Agusto Consulting warned that Nigeria’s current administration follows a high spending approach, raising further concerns about fiscal sustainability. He emphasized that while the Fiscal Responsibility Act recommends a deficit cap of 3% of GDP, Nigeria’s spending habits could push it beyond safe limits.
Experts continue to urge the government to adopt strict financial discipline, boost revenue generation and ensure efficient use of public funds to stabilize the nation’s economy.