Debt Securities Grew By 14.47% To N175.46trn In 12 Months – CBN

Nigeria’s stock of debt securities rose by 14.47 per cent to N175.46 trillion in 2025, driven largely by increased federal government borrowing to finance the budget deficit, according to the Central Bank of Nigeria (CBN).

The CBN, in its 2025 Annual Report, disclosed that the stock of debt securities expanded by N22.13 trillion, from N153.28 trillion recorded in 2024 to N175.46 trillion at the end of the review period. It attributed the increase to higher government borrowing requirements and a growing preference for debt securities over loans because of attractive yields.

According to the report, “the stock of debt securities grew by N22.127 trillion or 14.47 per cent to N175.463 trillion in 2025, compared with N153.283 trillion in 2024, attributable to increased borrowing activities by the government to finance the budget deficit, and the shift towards debt securities instead of loans, due to attractive yield.”

Despite the overall increase in debt securities, the apex bank said its claims on the Central Government through debt securities declined by N348.58 billion, or 1.30 per cent, to N26.40 trillion in 2025 from N26.74 trillion in the preceding year.

The report explained that the decline reflected a contraction in domestic claims on the Federal Government following the reduction in Ways and Means advances. The CBN also reported a decline in its holdings of debt securities issued by foreign entities, which fell by N303.62 billion, or 1.85 per cent, to N16.08 trillion from N16.39 trillion. It attributed the decrease to lower foreign investment inflows and portfolio rebalancing.

Similarly, holdings of debt securities issued by Other Depository Corporations (ODCs) declined by N7.71 billion, representing a 42.20 per cent decline, to N10.56 billion from N18.27 billion. The apex bank said the decline reflected investors’ preference for treasury bills and Federal Government bonds as high interest rates made government securities more attractive.

However, ODCs increased their holdings of debt securities issued by the Central Government by N2.24 trillion, or 12.50 per cent, to N20.15 trillion in 2025, up from N17.91 trillion in 2024.

The report noted Nigeria’s public debt remained within sustainable limits despite rising to N153.29 trillion as of the end of September 2025, equivalent to 35.55 per cent of GDP. The debt ratio remained well below the country’s self-imposed ceiling of 60 per cent of GDP and the 70 per cent threshold recommended for Market Access Countries.

Meanwhile, Nigeria’s fiscal position improved significantly in 2025 as federally collected revenue rose by 33.67 per cent to 36.08 trillion, driven by stronger oil and non-oil tax collections, even as total receipts remained below budget projections.

According to the apex bank’s 2025 Annual Report, the increase in government revenue strengthened fiscal sustainability, boosted allocations to the three tiers of government and reflected the impact of improved tax administration and stronger petroleum-related earnings.

The report showed that provisional federally collected revenue climbed to 36.08 trillion, equivalent to 8.0 per cent of Gross Domestic Product (GDP), from the previous year’s level, with non-oil revenue accounting for 64.71 per cent of total collections while oil receipts contributed 35.29 per cent.

Despite the strong performance, the CBN noted that overall revenue remained below the projections contained in the 2025 budget. “The fiscal policy thrust in 2025 centred on sustaining economic reforms, prioritising infrastructure and security, strengthening social investments, and expanding non-oil revenue to enhance fiscal sustainability,” the report stated.

The apex bank attributed the revenue growth largely to higher receipts from Value Added Tax (VAT), Corporate Income Tax (CIT), Petroleum Profit Tax (PPT) and oil royalties, reflecting ongoing reforms in tax administration and stronger compliance.

According to the report, non-oil revenue increased by 14.35 per cent to N23.35 trillion, representing 5.42 per cent of GDP, supported by stronger corporate tax collections, improved VAT receipts, digitalisation of tax processes and enhanced enforcement by the Nigeria Revenue Service (NRS).

Oil revenue recorded an even stronger performance, rising by 93.69 per cent to N12.73 trillion, driven mainly by higher remittances from the Nigerian National Petroleum Company Limited (NNPCL) and increased Petroleum Profit Tax collections.

After statutory deductions of N15.78 trillion from gross federation revenue, the report said a net balance of 20.30 trillion remained. Additional inflows of N808.73 billion from excess non-oil revenue, N737.54 billion from exchange gains and 100 billion from excess oil revenue lifted the total distributable revenue to N21.94 trillion.

The Federal Government received N7.57 trillion from the distributable pool, while state governments got N7.38 trillion, and local governments received N5.40 trillion. Oil-producing states shared N1.59 trillion as 13 per cent derivation revenue.

The report also showed that allocations to subnational governments rose sharply during the year. State governments received 28.98 per cent more than in 2024, while allocations to local governments increased by 29.40 per cent.

Among the states, Lagos received the highest gross federation allocation at N720.50 billion, followed by Delta with N674.10 billion, Akwa Ibom with N589.14 billion, Rivers with N508.40 billion and Bayelsa with N503.53 billion. Nasarawa recorded the lowest allocation at N157.90 billion, followed by Ekiti, Ebonyi, Gombe and Taraba.

The CBN further reported that tax revenue continued to dominate government earnings in 2025. Taxes contributed N32.06 trillion, representing 88.87 per cent of total federally collected revenue, compared with 74.74 per cent in 2024 and slightly above the budget target of 83.16 per cent.

Income tax receipts almost doubled to N19.26 trillion, accounting for more than half of total government revenue during the year, while non-tax revenue declined to N4.02 trillion from N6.82 trillion recorded in 2024.