Nigeria’s debt burden has increased faster than its revenue capacity over the past decade, according to recent analysis. The country’s total debt reached $62.5 billion in 2023, up from $48.3 billion in 2013. Meanwhile, its annual revenue has grown at a slower rate, averaging 4.2% compared to a 6.8% increase in debt.
Interest payments on the debt have become a major financial strain. In 2023, Nigeria spent $11.4 billion on debt servicing, more than the country’s total education budget. The government has struggled to balance debt repayment with essential public services, leading to budget shortfalls in healthcare and infrastructure.
This trend has been driven by rising borrowing to fund development projects and manage economic volatility. However, the country’s revenue growth has lagged due to declining oil prices and reduced foreign investment. The Central Bank of Nigeria has warned that the debt-to-GDP ratio could exceed 60% by 2025, worsening the fiscal challenge.
Nigeria has long faced challenges in managing its debt, with previous attempts at debt restructuring failing to provide lasting relief. The current situation highlights the need for structural reforms to improve revenue collection and reduce reliance on external borrowing. International financial institutions have urged the government to prioritize fiscal discipline and transparency in managing its debt obligations.
