By Seun Ibiyemi
Nigeria’s public debt is approaching unsustainable levels, with capital market experts cautioning that rising debt servicing costs, weak revenue generation, and structural inefficiencies are putting significant strain on the nation’s finances.
The warnings were issued during the Capital Market Academics of Nigeria (CMAN) Q4 2025 Virtual Symposium.
While official figures suggest Nigeria’s debt-to-GDP ratio remains within acceptable international thresholds, panelists including Dr. Tope Fasua, Dr. Ibrahim Natagwandu, Prof. Bright Eregha, Dr. Musa Baba, and Prof. Bongo Adi highlighted that the country’s debt service-to-revenue ratio has reached worrying levels.
They cited sluggish fiscal performance, a depreciating currency, and heavy reliance on short-term domestic borrowing as key drivers of the debt stress.
They also warned that Nigeria’s actual liabilities may be higher than reported, pointing to extra-budgetary obligations, private-sector-related debts, and unreported contingent liabilities as long-term risks that could destabilize the country’s fiscal health.
Prof. Wilfred Iyiegbunwe, session chairman, compared the current situation to the period before the 2005 Paris Club debt relief, cautioning that Nigeria could face another crippling debt overhang without strategic, evidence-based planning.
The forum stressed the importance of fully implementing Nigeria’s Medium-Term Debt Strategy to lengthen debt maturities, reduce interest rate exposure, and manage refinancing risks.
Borrowing, experts emphasized, should focus on projects with measurable economic returns rather than recurrent spending.
Speakers recommended rebalancing the current 50/50 domestic–external debt mix to minimize exchange-rate vulnerabilities, phasing out Ways and Means financing, and strengthening monitoring of contingent liabilities. They also advocated for greater use of Public–Private Partnerships (PPPs), innovative borrowing instruments such as Sukuk and Green Bonds, and rigorous cost–benefit analyses before approving new loans.
A key concern raised was Nigeria’s low tax revenue, estimated at about 10 per cent of GDP, compared with the African average of 20 per cent.
While initiatives like the Revenue Assurance and Optimization Programme (RevOp), the central billing system, and the Federal Treasury Receipts System were acknowledged, experts said improved implementation, transparency, and public trust are critical to expanding fiscal space.
The symposium concluded with calls for a unified national debt register covering all government tiers and off-balance-sheet liabilities to prevent fiscal shocks.
Prof. Maryam Abdul, in her closing remarks, warned that without accelerated institutional reforms and stronger domestic revenue collection, Nigeria risks repeating previous cycles of debt distress.