Who Will Pay This Debt? – Expert Reacts As Nigeria’s Public Debt Hits ₦159 Trillion

A financial expert, Paul Alaje, has warned that Nigeria’s growing debt profile will ultimately be borne not only by current citizens but also by future generations yet unborn.

This Video Is Trending Right Now →

Alaje, while reacting to the country’s latest debt figures, said the rising debt stock translates directly into higher servicing costs, which are funded through taxation and public revenue.

“The total debt stock of ₦159tn released by the Debt Management Office is reflective of the total number of loans or facilities that the Nigerian state has collected, which includes the sub-national and the federal government,” he said.

“That is the volume of money that is currently active in terms of debt. No forgiveness on any of them yet, and also cancellation.”

He explained that as the debt stock rises, the cost of servicing it also increases, placing more pressure on the economy.

“The higher our debt stock, which of course it is, the higher the rate of service, other things being equal,” he said.

Alaje added that with new borrowings already approved and others expected, Nigeria’s debt profile could rise significantly in subsequent reports.

“By the time the Debt Management Office is reporting for the first quarter of 2026, we would have crossed $160bn. So it’s more burden on the economy. Whether we have the capacity to pay or not is a different kettle of fish,” he stated in an interview with Daily Trust.

DMO Data Shows Debt Hits ₦159.28 Trillion

Naija News reports that the recent data released by the Debt Management Office (DMO) shows that Nigeria’s total public debt stood at ₦159.28 trillion as of December 31, 2025.

The figure represents an increase from ₦153.29tn recorded in September 2025, indicating a quarter-on-quarter rise of ₦5.98tn or 3.9 per cent.
On a year-on-year basis, the debt grew by ₦14.61tn or 10.1 per cent, up from ₦144.67tn recorded in December 2024.
In dollar terms, the country’s debt rose from $103.94bn in September 2025 to $110.97bn in December 2025.

Each Nigerian Owes About ₦724,000

With Nigeria’s population estimated at about 220 million, the latest figures translate to an average debt burden of approximately ₦724,000 per citizen.

The DMO data, however, excludes a recently approved ₦8.3tn borrowing from the United Arab Emirates and UK Export Finance, suggesting that the total debt stock could rise further in future reports.

A breakdown of the figures shows that domestic debt remains the largest component, accounting for 53.27 per cent of total public debt. It rose to ₦84.85tn in December 2025, up from ₦81.82tn in September 2025 and ₦74.38tn in December 2024.

The Federal Government holds the bulk of the domestic debt at ₦80.49tn, while states and the Federal Capital Territory account for ₦4.36tn, highlighting increasing reliance on local borrowing to finance fiscal gaps.

Nigeria’s external debt stood at ₦74.43tn as of December 2025, representing 46.73 per cent of total debt. This reflects an increase from ₦71.48tn recorded in September 2025 and ₦70.29tn in December 2024.

In dollar terms, external debt rose to $51.86bn, with the Federal Government accounting for ₦66.27tn and states and the FCT accounting for ₦8.16tn.

The continued expansion of Nigeria’s debt profile has heightened concerns over fiscal sustainability, particularly in the face of rising debt servicing obligations and pressure on government revenues.

In its 2026 macroeconomic outlook, the Central Bank of Nigeria projected a debt-to-GDP ratio of about 34 per cent, with foreign reserves expected to rise to $51 billion.

The report added that public debt as a percentage of GDP could increase to 34.68 per cent by the end of 2026, up from 33.98 per cent as of June 2025, largely due to expected new borrowings.

Inflation Worsening Burden – Alaje

Alaje further linked the rising debt to inflationary pressures, warning that it erodes purchasing power.

“Inflation increased from 15.06 to about 15.38. That, of course, has implications on the quality of money in people’s pockets,” he said.

“In fact, that is not the number that matters. It’s food inflation month on month, which rose by four per cent. I think a lot of Nigerians should be worried about that.”

On who ultimately bears the burden of the debt, the economist said it would fall on Nigerians through various fiscal measures.

“The question is who will pay this debt? Will the government pay? Will the people pay? Once you are part of the citizens, the government can decide to raise taxes, and everybody will pay,” he explained.

“So the entire citizens will pay… when those who are yet to be part of the labour force become part of it, they will also pay.”

He added, “Does that also mean that if this debt extends to two decades or more, the unborn generation will pay? The answer is yes.”

Alaje also addressed concerns over continued borrowing despite reports of improved government revenue.

“The claim that they surpassed their revenue target is not far from the truth. However, the reason for continuous borrowing could be that when the government generates revenue, it’s not the same time that we need the money,” he said.

“Meanwhile, salaries are to be paid almost immediately. Sometimes we borrow as a stopgap.”

He stressed that the country’s spending needs continue to outpace revenue growth.

“Our needs may expand… but is revenue increasing at the same rate as demand for roads, rail, energy and others? Clearly, the answer is not,” he added.

The economist concluded that Nigeria’s growing debt profile reflects a widening gap between revenue and expenditure, warning that unless urgent fiscal adjustments are made, the burden on citizens will continue to rise.