March 2, 2026/CSL Research
According to data published by the Debt Management Office (DMO) last week, Nigeria’s total public debt stock rose by 7.7% year-on-year (y/y) to ₦153.3 trillion by the end of the Q3 2025. On a quarterly basis, the increase was more modest, as total debt advanced by around 0.6%. Disaggregation of the debt stock showed that domestic debt accounted for roughly 53.4% of the total, slightly higher than 52.9% in the previous quarter.
Meanwhile, external debt made up around 46.6% of the total debt stock, down from 48.4% in the prior quarter. We note that the domestic-to-external debt composition slightly diverges from the revised target set by the DMO for the 2024-2027 period, with domestic and external borrowings projected at 55.0% and 45.0%, respectively.
It is worth mentioning that although the external debt advanced by 3.1% quarter-on-quarter (q/q) to US$48.5 billion, in local currency terms there was a modest decline of about 0.5% q/q to ₦71.5 trillion by the end of Q3 2025. This moderation in Naira terms was driven by the improvements in the local currency, with the exchange rate appreciating by around 3.7% q/q to ₦1,475/US$ at the end of the review period. We maintain our base-case estimate that the total public debt closed last year at around ₦158 trillion, underpinned by sustained domestic borrowings as well as the US$2.3 billion Eurobond issuance in November 2025.
Regarding debt sustainability, we note that debt levels remain well below the threshold set by the DMO (revised target of 60.0%) as well as the IMF (70.0% under its Market Access Country Debt Sustainability Framework), largely driven by the impact of the rebasing of the Gross Domestic Product (GDP). Based on our full-year estimates of the debt stock relative to nominal GDP, the debt-to-GDP ratio is expected to close 2025 at around 35.8%, down from 38.8% recorded in 2024. Looking ahead, although total public debt is projected to increase this year to between ₦164.5 trillion and ₦172.2 trillion, the stronger expansion in nominal GDP should drive a further moderation in the debt ratio to approximately 33.0% of GDP.
Click here to download full report: CSL Nigeria Daily – 03 March 2026 – Public Debt.pdf
