Nigeria’s debt crisis is deepening, with new figures showing a troubling rise of ₦4.72 trillion in just the first quarter of 2025. This brings the country’s total national debt to a staggering ₦149.38 trillion, up from ₦144.67 trillion recorded at the end of 2024. 

Behind the numbers lies a worrying trend: consistent borrowing to fill budget gaps, worsened by the declining value of the naira.

At the heart of this rise is the growing cost of external loans. While Nigeria’s external debt only grew modestly in dollar terms adding about $3.86 billion the weakening naira meant that the local value of that debt ballooned. 

The external debt now stands at ₦70.63 trillion, significantly inflated by exchange rate volatility, not just new borrowing.

The official exchange rate used by the Central Bank in early 2024 was ₦1,330.26 to $1, and though the Q1 2025 rate hasn’t been released, the widening gap between naira and dollar values suggests the local currency has continued to weaken. 

As the naira depreciates, Nigeria pays more in local currency for the same amount of dollar debt.

Meanwhile, domestic debt is also on the rise, now totaling ₦78.75 trillion. This means Nigeria’s borrowing is coming from both foreign creditors like the World Bank and Eurobond holders, as well as from within its own financial system.

The rising debt is not just a macroeconomic statistic, it’s beginning to hit home. Nigeria’s per capita debt has now crossed ₦600,000, raising serious questions about sustainability. 

As more of the country’s income goes into debt servicing, there’s less left for healthcare, education, infrastructure, and other pressing development needs.

Much of the borrowing has been justified as necessary to bridge budget deficits or fund capital projects. But with the naira in decline and revenue generation still shaky, the burden of repayment is becoming heavier. 

Critics argue that unless Nigeria reforms its borrowing practices and strengthens its economy, the country may be headed for a deeper financial crunch.