Market News

•Says N159trn debt may affect country’s development 

Economic experts have described Nigeria’s fiscal obligations as terrifying if looked at strictly through the lens of naira, stating that the country’s debt of over N159 trillion may hinder development.

Speaking to Nigerian Tribune, an Economist, Dr. Iyke Ezeugo, said the nation’s public debt skyrocketed to an astronomical N159.28 trillion in a matter of months, “the immediate, visceral fear is that the country is being blindly auctioned off to the highest bidder. But if you analyse Nigeria’s fiscal obligations strictly through the lens of the Naira, you are staring at a terrifying, albeit distorted, illusion.”

He said that to truly understand the crushing weight of Nigeria’s borrowing, we must look past the breathless headlines. We must examine the hard currency, dissect the fine print, and unmask the specific creditors holding the collateral of the nation’s future.

“While the breathtaking leap in the Naira figure—now representing roughly $110.97 billion—is primarily a mathematical side effect of the currency’s dramatic devaluation, the underlying dollar debt stock reveals a far more calculated story. 

“It is a story of aggressive, high-stakes fiscal restructuring. The government is rapidly swapping cheap, conditional debt for expensive commercial bonds, formalising hidden overdrafts, and tying the nation’s infrastructural destiny to rigid foreign contracts.

“Before we examine how long it will take to escape this trap and what the alternatives are, let us map exactly who owns the ledger. Domestic borrowing currently accounts for the lion’s share of the burden at N84.85 trillion (53.27 percent). However, the external debt—standing at $51.86 billion—is where the nation’s sovereignty is truly negotiated.

“Multilateral institutions hold a combined $23.85 billion, with the World Bank alone accounting for a staggering $19.89 billion. While these are the “cheapest” loans available (1-2 percent interest), they act as a rigid policy trap. Bilateral loans stand at $6.72 billion, dominated entirely by the Export-Import Bank of China.”

Ezeugo explained that Chinese debt funds are visible mega-projects. However, “these loans legally mandate that Chinese state-owned enterprises will be the sole contractors. China is securing guaranteed, dollar-denominated export contracts for its own industries, which Nigeria must repay over decades.

“The most controversial element of the domestic debt is the securitisation of the N23.9 trillion “Ways and Means” advances—money illegally printed out of thin air by the previous administration to cover shortfalls. The current administration formalised this liability into high-interest government bonds. Taxpayers are now paying premium interest rates to service the cost of past administrative incompetence.

“To understand why the debt feels so suffocating to the everyday citizen, we must pull back the curtain on the most volatile segment of the external ledger: Commercial Debt, which sits at $18.55 billion.

“When the Nigerian government needs quick cash with no policy strings attached, it issues a “Eurobond.” Despite the name, these are simply sovereign bonds issued in a foreign currency, typically US dollars. The buyers are not governments; they are ruthless international private investors—hedge funds, global asset managers, and foreign pension funds.

“Because Nigeria is viewed as a high-risk emerging market, these investors demand a steep premium. In late 2025, Nigeria issued a $2.35 billion Eurobond, agreeing to pay yields of 8.63 percent and 9.13 percent.

“Here is the mechanical trap: Nigeria earns naira but must pay this nine percent interest in Dollars. Every time the naira devalues against the dollar, the cost of servicing that debt mechanically explodes. If the government issues a $2 billion bond at nine percent, it owes $180 million in interest annually. If the exchange rate is N500/$, that’s N90 billion. If the exchange rate crashes to N1,400/$, that exact same debt suddenly costs N252 billion to service.”

The expert noted that government touts the oversubscription of these bonds as ‘investor confidence’, “but the reality is simpler: Wall Street loves high-yield debt backed by a sovereign nation’s tax base.

“This massive borrowing directly bleeds into the real economy. For the 2026 fiscal year, Nigeria is projected to spend over N15.5 trillion just on servicing its debt. To find this staggering amount of Naira, the government borrows heavily from the domestic market,” he stated.

Another economic expert, Albert Egar, said it will take generations unborn to pay Nigeria’s debt, adding that the borrowing has not ended.

He predicted that “before this year finishes, the Federal government will borrow again. Look at how much the country is using to service these debts alone, so what about the repayment?” Egar questioned.

The expert observed that these financial obligations are preventing the government from advancing development. “The money that should go into huge projects is turned in for debt servicing, so much so that little or nothing is left for development,” he stated.

Even though experts and analysts have continued to express concerns over Nigeria’s rising debt profile, the Federal government has reaffirmed that the country’s debt portfolio is still within the safe zone, insisting that Nigeria is capable of handling its financial obligations.