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Nigeria's debt profile has significantly increased over the years, reflecting the country's ongoing economic challenges.
As of 2023, Nigeria's total public debt stood at approximately ₦87 trillion (about $113 billion), a sharp rise from ₦12.12 trillion ($63 billion) in 2015.
In 2024, the Management Office (DMO) says Nigeria’s total public debt stock hit ₦121.67 trillion ($91.46 billion) in March.
This growth has been driven by persistent budget deficits, revenue shortfalls, and the need to finance critical infrastructure projects.
External debt accounts for around 40% of the total and includes loans from multilateral institutions, bilateral lenders, and private creditors.
A notable concern is the increasing reliance on private creditors, whose non-concessional loans come with higher interest rates and shorter repayment periods. As a result, debt servicing costs have ballooned, consuming over 90% of Nigeria's revenue in recent years.
This mounting debt burden has set off alarm bells among economists and policymakers. It seriously threatens the country's ability to finance crucial services like health, education, and social welfare, exacerbated by the economic hardships faced by the Nigerian people.
Advocacy moves to curb Nigeria's alarming debt profile
However, stakeholders in the civil society space have already begun making moves to help find lasting solutions to curb Nigeria's debt crisis.
Christian Aid Nigeria and other civil society bodies converged in Abuja on Wednesday, August 28, to dialogue on how to address Nigeria's debt profile.
Speaking to Pulse Nigeria at the dialogue, Christian Aid Country Director Temitope Fashola highlighted the urgency of managing Nigeria's debt more effectively.
"Nigeria is in a very difficult economic situation as we speak," he stated, emphasising the importance of avoiding excessive borrowing that could exacerbate the plight of ordinary Nigerians.
Over the past two years, Christian Aid Nigeria has been deeply involved in analysing the country's debt profile and its impact on citizens.
According to Fashola, the goal is to "change that paradigm" and ensure that debt management does not hinder critical investments in education, healthcare, and other vital sectors.
"I think we're in a difficult situation, but I don't think it's impossible…to really plan and map out a way forward to get out of it over a period of time," he remarked, pointing to ongoing advocacy efforts both within Nigeria and globally for debt relief.
Issues of Nigeria's debt crisis and possible solution
Giving an expert view on the situation, Ngochukwu Munachi, the Gender Justice Lead of the Governance and Rights Programme for Christian Aid Nigeria, said the issue is not merely about the volume of debt but the nature of the loans, which he describes as "non-concessional" with high interest rates, short maturity periods, and minimal transparency.
Munachi highlights that while loans from external creditors like multilateral and bilateral lenders are expected, the growing reliance on private creditors is increasingly problematic.
"The component of our debt owed to private creditors makes up a more significant proportion of our debt service obligations," Munachi explains.
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He said this has severe consequences for Nigeria's ability to finance critical social sectors such as health, education, and social welfare, which are vital for the country's development.
The situation is exacerbated by Nigeria's slipping status into a low-income country, as assessed by credit rating agencies. This decline limits Nigeria's access to more favourable loans from multilateral and bilateral sources, forcing the government to turn to private creditors who offer less favourable terms.
"These non-concessional loans have incredibly high interest rates, very short maturity periods, and essentially no moratoriums," Munachi warns.
He stated that one of the most alarming aspects of this debt crisis is the lack of transparency surrounding the agreements with private creditors.
Munachi points out that private creditors often fail to participate when opportunities arise for debt restructuring, leaving Nigeria in a precarious position.
In response to this growing crisis, Christian Aid Nigeria and its implementing partners are working to raise awareness among citizens and policymakers.
"We have established the evidence base showing the increasing role of private creditors in Nigeria's debt crisis," Munachi states.
The organisation aims to mobilise civil society and amplify citizens' voices to elicit effective policy responses.