DMO Calls Debt Sustainable, But Experts Warn of Crisis as Nigerians Question Borrowing
Nigeria’s debt trajectory has become a flashpoint of public concern, with citizens questioning the federal government’s borrowing spree despite official claims of improved revenue generation.
At the heart of the debate is President Bola Tinubu‘s request — recently approved by the National Assembly — to borrow ₦1.15 trillion from the domestic debt market to plug the 2025 budget deficit.
Lawmakers expanded the budget to ₦59.99 trillion, creating a ₦14.10 trillion deficit, of which ₦12.95 trillion is already earmarked for borrowing.
Debt Profile Snapshot
According to the Debt Management Office (DMO), Nigeria’s total public debt stock as of June 30, 2025 stood at ₦152.4 trillion, comprising ₦71.85 trillion in external debt and ₦80.55 trillion in domestic debt while debt-to-GDP Ratio: put at 40% – the figure the Director General of DMO, Patience Oniha claims is “sustainable,” as it is below 70% global benchmark.
“Debt remains sustainable; Nigeria’s ratio is below international thresholds,” she insists.
Government’s Position
Echoing Oniha, the Chairman of the Senate Committee on Appropriation, Senator Olamilekan Adeola, stated that borrowing is embedded in the 2025 Appropriation Act; “loans are part of revenue sources.”
Corroborating Adeola, Senator Sani Musa (Finance) posits that “No economy grows without borrowing… this is global best practice.”
Counterpoints & Risks Identified
Analysing the transparency gap, Senator Abdul Ningi insists Nigerians deserve clarity on loan specifics and impact.
Debt Service Burden:
Speaking recently about Nigeria’s debt profile, the Chief Executive Officer of the Centre for the Promotion of Private Enterprise (CPPE), Dr Muda Yusuf, insisted that debt servicing already consumes “80% of government revenue, outpacing capital expenditure.”
He warns that borrowing is used to fund consumption and recurrent costs, rather than productive projects.
Fiscal Crisis Risk: Experts warn that crowding out essential government functions is likely if debt continues unchecked.
Private Sector Impact:
Bismarck Rewane (FDC) suggested that domestic borrowing could crowd out private investment, lead to higher interest rates, and fuel inflation.
Threshold Warning: BudgIT’s Vahyala Kwaga cautions that new loans may breach Nigeria’s debt sustainability limits without accountability for past borrowings.
TheDigger News Intelligence Assessment
Nigeria’s debt debate is no longer a technical fiscal matter — it is a strategic governance challenge.
Public Trust Deficit: Citizens perceive borrowing as reckless, particularly when it is tied to recurrent expenditures.
Economic Strain: Rising debt service obligations risk hollowing out capital investment, undermining growth.
Political Risk: A lack of transparency could erode confidence in both the executive and legislative branches.
Geopolitical Context: While the DMO frames debt as “sustainable” by global standards, Nigeria’s reliance on borrowing for consumption rather than infrastructure places it on a fragile path compared to peer economies.
Big Deal Takeaway for TheDigger News Intelligence Unit
Nigeria’s rising debt is not just about numbers—it is about credibility, sustainability, and governance capacity.
The government’s insistence on global best practices clashes with expert warnings of a fiscal crisis.
The intelligence gap lies in where the money is going and how debt service is reshaping Nigeria’s economic future.