Advisory Firm Warns over Nigeria’s Debt Sustainability

Nigeria’s rising debt profile has come under fresh scrutiny as financial advisory firm CFG Advisory warned that the country may be edging towards an unsustainable fiscal path, citing rapid debt accumulation and an aggressive borrowing pattern.

Chief executive of CFG Advisory, Tilewa Adebajo, raised concerns over the pace at which both domestic and external obligations have grown, noting that the trend poses significant risks to macroeconomic stability.

According to him, Nigeria’s domestic debt surged from N54 trillion in June 2023 to about N90 trillion by December 2025, and is already approaching the N100 trillion threshold as of April 2026. External debt, he added, also climbed sharply from $41 billion to $60 billion within the same period.
Adebajo expressed particular concern over what he described as the increasing reliance on dollar-denominated loans from foreign commercial banks, often backed by domestic Federal Government securities. He noted that such borrowings are being used largely to finance recurrent expenditure and projects that lack the capacity to generate returns sufficient to repay the loans.
He further observed that Nigeria’s widening fiscal deficit has forced the government into what he termed a “high-frequency borrowing model,” with monthly debt auctions becoming the backbone of fiscal financing.
Adebajo pointed out that domestic borrowing has quadrupled over the past five years, while borrowing between January and April 2026 has already hit N8.1 trillion, representing about 80 per cent of the total N10 trillion recorded for the full year 2025.
He pointed to a structural shift in the debt market, with the government increasingly issuing long-tenor bonds, whose offer sizes have risen by over 60 per cent year-on-year, while treasury bills have declined by about 15 per cent.
Projecting current trends, the CFG Advisory boss warned that total borrowing for 2026 could exceed N24 trillion by year-end if the current pace is sustained, more than double the previous year’s figure.
“This trajectory is clearly unsustainable,” Adebajo said, warning that it could worsen Nigeria’s already strained revenue-to-debt service ratio, potentially breach provisions of the Fiscal Responsibility and Appropriation Acts, and crowd out private sector access to credit.
He added that the implications could extend to slower economic growth and heightened inflationary pressures, as government borrowing continues to dominate the domestic financial market.