The Federal Government has defended Nigeria’s rising public debt stock of about N152 trillion, arguing that the increase is largely the result of improved transparency and exchange rate adjustments rather than reckless new borrowing.
Speaking at the presentation of the Nigerian Economic Summit Group (NESG) 2026 Macroeconomic Outlook in Lagos, the Coordinating Minister of the Economy and Minister of Finance, Mr. Wale Edun, said the Tinubu administration deliberately chose openness and fiscal discipline over what he described as opaque accounting practices of the past.
“Nigeria’s total public debt stands at N152 trillion, just over $100 billion,” Edun said. “Importantly, N30 trillion previously recorded as Ways and Means has now been transparently recognised, while exchange rate adjustments account for much of the remaining increase, not new borrowing.”
He acknowledged that debt servicing remains a challenge but stressed that transparency has significantly improved, noting that government has continued to meet all statutory obligations.
“Despite fiscal pressures, salaries, pensions and debt service have been paid. That underscores our commitment to discipline and transparency,” he said.
Budget performance and reforms
On the 2025 Budget, Edun said Nigeria’s fiscal position showed resilience despite global headwinds and domestic constraints. According to him, the fiscal deficit stood at 3.4 per cent of GDP in 2025, slightly above the Fiscal Responsibility Act threshold, reflecting ongoing adjustment efforts.
He attributed revenue constraints mainly to shortfalls in oil and gas receipts but noted improvements in non-oil revenue. He also said fiscal federalism reforms had strengthened state finances, with many states now recording budget surpluses above three per cent, enabling increased spending on health, education and public services.
After more than two years of what he described as “politically difficult” reforms, Edun said Nigeria was now approaching a phase of consolidation.
“But consolidation demands resolve, discipline and policy consistency. Nigeria cannot afford to retreat or pause,” he warned.
According to him, long-standing distortions such as fuel subsidies, preferential access to foreign exchange and rent-seeking opportunities have been dismantled, creating a more level playing field driven by productivity and innovation rather than arbitrage.
Investor confidence, growth outlook
Edun said Nigeria’s reforms are beginning to yield positive global signals, citing the country’s exit from the FATF grey list and removal from the European Union’s list of high-risk third countries, as well as improved sentiment from credit rating agencies.
He added that economic activity is broadening, with 27 sectors growing above three per cent, though manufacturing and agriculture are “not yet where we want them to be.” Inflation, he said, remains a challenge but reflects the commitment of monetary authorities to price stability.
On the capital market, Edun described recent improvements as critical to growth financing, noting that stock market capitalisation is approaching $500 billion, a key threshold for global credibility.
Looking ahead, he said government projects economic growth of about 4.68 per cent in 2026, with inflation averaging 16.5 per cent and the exchange rate benchmarked at N1,400/$. The 2026 Budget, titled “Budget of Consolidation, Renewed Resilience and Shared Prosperity,” aims to translate macroeconomic gains into food security, electricity, housing and employment.
Analysts push back
Despite the government’s defence, market analysts have raised concerns that fresh borrowing still plays a material role in sustaining government operations.
Reacting, Oluropo Dada, 13th President of the Chartered Institute of Stockbrokers (CIS), said data from the bond market show that the Federal Government raised over N7 trillion from FGN bonds alone in the last two years, excluding Treasury bills.
“Budget documents show a persistently widening fiscal deficit, which by definition must be financed. In practice, the scale of the deficit suggests that new borrowing has played a material role,” Dada said, adding that clearer reconciliation between deficits, borrowing sources and debt outcomes is essential to maintain market confidence.
Similarly, David Adonri, Vice Executive Chairman of High Cap Securities, said while the recognition of legacy and shadow debt is commendable, it does not fully explain the current scale of Nigeria’s debt burden.
“I don’t think legacy debt is the sole reason for the current colossal figure. Further reckless borrowing by this administration continues to worsen the situation,” he said.
Former CIS President Olatunde Amolegbe took a more measured view, arguing that debt sustainability matters more than the absolute size of the debt. While Nigeria’s debt-to-GDP ratio of about 36 per cent appears manageable, he warned that debt-to-revenue metrics call for caution.
Analyst Clifford Egbomeade said Edun’s explanation is consistent with public finance logic, noting that about N30 trillion reflects recognised Ways and Means advances and roughly N49 trillion stems from foreign debt revaluation after exchange rate adjustments.
However, he cautioned that higher naira-denominated debt inevitably increases debt service pressures amid weak revenue performance.
“Transparency explains the numbers,” Egbomeade said, “but sustainability will depend on how fiscal authorities manage servicing costs, revenue mobilisation and disciplined spending going forward.”
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