NESG Raises Concern Over Nigeria’s Rising Debt Pressure

The Nigerian Economic Summit Group has raised concerns over Nigeria’s rising debt burden, warning that despite signs of temporary stabilisation in some fiscal indicators, the country remains exposed to significant debt-related risks due to persistent structural weaknesses.

In its latest debt monitoring report, the policy advocacy group said Nigeria’s debt profile between 2024 and 2025 reflects only marginal improvement, with underlying fiscal pressures remaining elevated.

According to the report, Nigeria’s Debt Burden Index (DBI) declined to 70.9 points in 2024 from a peak of 83.6 points recorded in 2023.

The NESG noted that while the reduction could suggest easing debt stress on the surface, the improvement was largely driven by a moderation in debt servicing pressures rather than any substantial strengthening in the country’s fiscal position.

The group stated that Nigeria’s public debt-to-GDP ratio rose sharply to 40.6 per cent in 2024, reflecting continued dependence on borrowing to finance fiscal deficits amid weak revenue generation.

It explained that the divergence between the declining DBI and rising debt-to-GDP ratio underscores the fragility of the country’s fiscal condition.
“The underlying fiscal vulnerability remained significant,” the report stated.

The NESG further warned that debt pressure is expected to remain high throughout 2025, based on quarterly projections of the Debt Burden Index.
According to the report, the DBI is projected to rise to 78.4 points in the first quarter of 2025 before peaking at 79.6 points in the second quarter.

Although the index is expected to moderate slightly to 76.2 points in the third quarter, it is projected to rise again to 79.2 points by the fourth quarter of the year.

The organisation said the pattern suggests that debt pressure has not structurally eased but continues to fluctuate within what it described as a “high-stress band.”
The NESG stressed that the transition from 2024 to 2025 does not yet indicate a decisive move toward debt sustainability.

Rather, it said the current fiscal situation reflects a system making only limited adjustments, while improvements in headline debt indicators continue to mask deeper structural imbalances in public finance management.

The report added that the Debt Burden Index offers a more realistic picture of Nigeria’s fiscal health than conventional debt indicators, warning that the country remains in a high-risk fiscal environment despite signs of apparent stabilisation.

The NESG has repeatedly called for stronger fiscal reforms, improved revenue mobilisation, and more prudent debt management to reduce pressure on public finances and strengthen economic resilience.