Nigeria’s public debt position is drawing renewed attention as global government borrowing hits historic highs, with analysts warning that the country’s fiscal vulnerabilities lie less in the size of its debt and more in its capacity to service it.

New data indicates that global public debt has surged to $111 trillion in 2025, a more than fivefold increase from $19.7 trillion in 2000. The sharpest increases followed the 2008 global financial crisis and the COVID-19 pandemic, periods that triggered expansive fiscal interventions across major economies.

While advanced economies dominate the global debt landscape, accounting for the bulk of borrowing, attention in Africa has been drawn to a statistic showing that 10 countries hold about 72 percent of the continent’s total public debt. Egypt leads with $348 billion, followed by South Africa at $306 billion, while Nigeria’s debt stands at roughly $99 billion.

However, economic experts caution against interpreting these figures in isolation. Baba Yusuf Musa, Director-General of the West African Institute for Financial and Economic Management, said aggregating debt across African countries without context can be misleading.

“Africa is not a single economy but a collection of 54 countries with varying economic structures, revenue bases and repayment capacities,” Musa said in a policy brief. “Comparing raw debt figures without considering these differences offers little insight into actual risk.”

The United States, for instance, carries over $38 trillion in public debt, yet remains central to the global financial system due to its strong revenue base and capacity to service obligations. Similarly, China holds about $18.7 trillion in debt, reflecting rapid infrastructure-driven borrowing over the past two decades.

For Nigeria, analysts say the concern lies in fiscal sustainability rather than absolute debt levels. At its peak, debt servicing has reportedly consumed close to 90 percent of government revenue, leaving limited fiscal space for critical sectors such as infrastructure, healthcare and education.

The country’s tax-to-GDP ratio, estimated between 10 and 12 percent, remains among the lowest globally for an economy of its size. This weak revenue base has compounded the challenge of managing rising debt obligations.

Compounding the pressure is Nigeria’s exposure to foreign currency-denominated debt. The depreciation of the naira in recent years has significantly increased the cost of servicing external loans, tightening fiscal conditions further.

In addition, the country’s reliance on oil revenues continues to pose risks. Volatility in global oil prices has made earnings unpredictable, undermining the government’s ability to maintain stable debt servicing.

 

Policy experts argue that addressing these structural issues is critical to restoring fiscal balance. Recommendations include broadening the tax base, improving tax administration and ensuring that borrowing is tied strictly to productive investments capable of generating economic returns.

There are also calls for proactive engagement with creditors where repayment pressures intensify. Analysts say debt restructuring, when necessary, should be viewed as a responsible fiscal tool rather than a sign of economic distress.

As global debt continues to rise, experts emphasise that the key issue is not which country owes the most, but which has the least capacity to repay. For Nigeria, that distinction is becoming increasingly important as policymakers navigate a tightening fiscal environment.

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