You ever wonder how a country like Nigeria, with all its oil riches and bustling markets, ends up owing more than it seems possible? Well, as of June 2025, our public debt has ballooned to a staggering N152.4 trillion. That’s not just a number—it’s a signal of deeper economic currents that affect everything from business investments to everyday prices at the market. For folks in boardrooms or starting their own ventures, understanding this debt isn’t optional; it’s key to navigating what’s next.
Let’s break it down without getting too tangled in the jargon. Public debt is basically what the government borrows to keep things running—think infrastructure projects, salaries, or plugging budget holes. And right now, it’s at its highest in naira terms ever. Compared to March 2025, when it sat at N149.39 trillion, that’s a jump of about 2%. In dollars, it’s up to around $99.66 billion from $97.24 billion. Not drastic, but steady enough to raise eyebrows among investors watching exchange rates like hawks. Honestly, seeing the trend line creep up year after year makes you pause— is this sustainable, or are we heading for rough waters?
Splitting the Bill: Domestic vs. External Debt
Here’s the thing about debt—it’s not all the same. Nigeria’s pile splits roughly into domestic (what we owe within our borders) and external (loans from abroad). Domestic debt makes up the bigger chunk at N80.55 trillion, or about 53% of the total. That’s up from N78.76 trillion just three months earlier. Why the rise? Governments often turn to local borrowing because it’s quicker and avoids currency risks. But it crowds out private businesses vying for the same funds—imagine banks lending to the feds instead of your startup.
On the flip side, external debt stands at N71.85 trillion, or $46.98 billion. This grew from $45.98 billion in March, thanks partly to naira fluctuations. External loans come with strings, like interest rates tied to global moods. Remember the naira devaluation back in 2023? Echoes of that still amplify these costs, making repayment feel like chasing a moving target. To put it in perspective, here’s a quick snapshot:
| Domestic Debt | 80.55 | 53% |
| External Debt | 71.85 | 47% |
| Total | 152.4 | 100% |
Peeling Back the Layers on Domestic Debt
Diving a bit deeper—okay, not too deep, but enough to see the mechanics—domestic debt isn’t one big loan. It’s a mix of instruments that sound fancy but are straightforward once explained. To make it clearer, let’s lay it out in a table:
| FGN Bonds | 36.52 |
| Securitized Ways and Means | 22.72 |
| Treasury Bills | 12.76 |
| Sukuk Bonds | 1.29 |
| Savings Bonds | 0.09 |
| Green Bonds | 0.06 |
| Promissory Notes | 1.73 |
| Dollar-Denominated Bonds | 1.40 |
| Total Domestic | 80.55 |
FGN bonds lead the pack at N36.52 trillion. These are like IOUs the government issues to investors, promising steady returns. Then there’s N22.72 trillion from securitized Ways and Means advances—essentially, turning central bank overdrafts into proper debt. It’s a way to formalize what was once emergency borrowing.
Treasury bills chip in N12.76 trillion; these short-term notes are popular with banks for their quick turnaround. Sukuk bonds, which are Sharia-compliant and often fund roads or bridges, add N1.29 trillion. Smaller bits include savings bonds at N91.53 billion (aimed at everyday savers), green bonds for eco-friendly projects at N62.36 billion, and promissory notes at N1.73 trillion. Oh, and don’t forget the N1.40 trillion in dollar-denominated bonds, blending local and foreign flavors.
It’s a diverse portfolio, sure, but the reliance on bonds and bills means interest payments are eating into budgets. In Q2 2025 alone, domestic debt service hit N1.7 trillion, peaking at over N800 billion in April. That’s money that could go toward schools or hospitals, right? Yet, in a twist, this setup stabilizes the naira somewhat by keeping funds circulating locally.
Who Holds the IOUs Abroad? External Creditors Unpacked
Shifting gears to the external side— this is where international players come in, and it’s fascinating how it mirrors global ties. Multilateral lenders dominate with $23.19 billion, nearly half of external debt. Think World Bank or African Development Bank; they offer concessional loans with lower interest, often for development projects like power grids or agriculture. It’s helpful, but dependency on them highlights Nigeria’s challenges in accessing cheaper market funds.
For a breakdown:
| Multilateral | 23.19 | 49% |
| Bilateral | 5.66 | 12% |
| Eurobonds | 17.13 | 36% |
| Other Commercial | 1.00 | 3% |
| Total External | 46.98 | 100% |
Bilateral creditors—government-to-government deals—hold $5.66 billion, about 12%. Countries like China or France might be involved here, funding big-ticket items like railways. Then there’s the commercial slice: Eurobonds at $17.13 billion (36% of external), which are riskier because they’re market-driven. Nigeria’s been issuing these since 2011, but with global rates rising, servicing them stings. Other commercial loans add $1 billion.
Honestly, this mix feels like a high-wire act. Eurobonds expose us to investor whims—if oil prices dip or geopolitics flare, yields spike. But multilateral funds provide a buffer, often with advice on reforms. It’s a mild contradiction: borrowing more to grow, yet risking stagnation if debt service overwhelms revenues.
The Subnational Angle: States and FCT in the Mix
Don’t overlook the states—they’re part of this too. Combined, the 36 states and Federal Capital Territory owe N11.32 trillion, or 7.4% of total public debt. Of that, external is $4.81 billion (N7.36 trillion), and domestic N3.96 trillion. Lagos or Rivers might borrow for mega-projects, but smaller states lean on federal allocations. This decentralization adds complexity; if states default, it ripples nationally.
You know what? This subnational debt grew slightly from N3.86 trillion domestic in March, showing governors are tapping markets amid revenue squeezes. It’s relatable— like a family where everyone chips in but the parents carry most.
What Does This Mean for the Economy?
So, why should executives or entrepreneurs care? Debt isn’t inherently bad; it’s fuel for growth if used wisely. But Nigeria’s trajectory raises flags. Debt-to-GDP ratio hovers around 40-50%, not alarming by global standards (think Japan’s 250%), but servicing costs are the real kicker. With revenues strained—oil still dominates despite diversification talk—paying interest crowds out investments.
Take private sector credit: It dipped to N76.12 trillion in June 2025, the fourth decline this year. Banks prefer safe government bonds over risky business loans, starving startups. Add inflation and forex woes, and it’s a tough environment. Yet, there’s optimism—FAAC disbursements are up, and reforms like subsidy removal aim to boost non-oil revenues.
Picture it like this: Debt is the bridge over a river of deficits, but if the bridge gets too heavy, it sags. Policymakers are pushing for better tax collection and export growth, referencing tools like the Nigeria Customs Service’s modernized systems or AfCFTA opportunities. Seasonal factors play in too—with harvest season wrapping up, agricultural exports could ease pressures.
Looking Ahead: Can We Turn the Tide?
Wrapping up, Nigeria’s N152.4 trillion debt as of June 2025 is a wake-up call, not a death knell. It’s grown, yes, but so has the economy in nominal terms. The key is sustainability—ensuring borrowings fund productive assets, not just consumption. Investors, keep an eye on DMO reports; they’re gold for spotting trends.
Rhetorically, are we borrowing our way to prosperity or digging a hole? Time will tell, but with smart reforms, we might just climb out stronger. For now, it’s about balance—leveraging debt without letting it leverage us.
