Nigeria’s total public debt could climb to N160.6tn by the end of 2025, a development that raises fresh concerns about the country’s rising fiscal vulnerability, according to a new outlook by CSL Stockbrokers Limited.
The financial services firm, a subsidiary of FCMB Group Plc, stated in its H2 2025 economic outlook that the Federal Government is likely to borrow an additional N9.3tn or more in the second half of the year to fund its widening fiscal deficit.
This could bring the country’s public debt to at least N160.6tn, representing about 50.2 per cent of the pre-rebased Gross Domestic Product.
The report read, “We expect the government to ramp up its borrowing efforts in the second half of the year to bridge the widening fiscal gap. We believe the government could come to the market to raise around N9.3tn or more in the second half of the year, which could see the total public debt rise to at least N160.6tn (c.50.2 per cent of pre-rebased GDP) by the end of the year.”
The report warned that the government’s fiscal position remains fragile, with oil revenues underperforming and planned tax reforms facing delays. Nigeria had projected a budget deficit of 3.9 per cent of GDP in the 2025 budget, but CSL forecasts that the actual deficit could widen to 5.8 per cent of GDP, due to shortfalls in both oil and non-oil revenue.
So far this year, Nigeria has struggled to meet its oil production target of 2.06 million barrels per day, managing only an average of 1.67mbpd between January and May. Similarly, oil prices have fallen short of the $75 per barrel benchmark, averaging $70.82. These underwhelming figures have left a significant hole in expected government earnings.
In the non-oil segment, efforts to boost revenue through a proposed increase in the Value Added Tax rate from 7.5 per cent to 10 per cent have stalled, as lawmakers pushed back on the plan. Moreover, the implementation of new tax legislation has been postponed until 2026, further limiting the government’s ability to raise funds through domestic means.
CSL also noted that the Nigerian National Petroleum Company Limited is currently remitting only about half of the savings from the removal of fuel subsidies to the Federation Account.
This partial remittance is seen as another constraint on the government’s revenue mobilisation drive, making it more difficult to contain the growing fiscal deficit. To bridge the funding gap, the Federal Government is expected to intensify its borrowing activities.
The report pointed to a recently submitted $25bn medium-term borrowing plan, which includes the possibility of issuing foreign-currency-denominated local debt instruments. There is also the likelihood of a return to the international capital market to refinance the Eurobond maturity scheduled for November.
Despite the anticipated debt increase, Nigeria’s debt-to-GDP ratio may appear lower at the end of 2025—around 50.7 per cent—mainly due to the recent GDP rebasing exercise.
However, analysts at CSL maintain that this cosmetic improvement in the ratio does not mask the underlying concerns over debt sustainability, especially in the absence of meaningful revenue growth.
The PUNCH earlier reported that Nigeria’s total public debt rose to N149.39tn as of March 31, 2025, marking a year-on-year increase of N27.72tn or 22.8 per cent compared to the N121.67tn recorded in the corresponding period of 2024.
The figure, released by the Debt Management Office, also showed a quarter-on-quarter increase of N4.72tn or 3.3 per cent from N144.67tn as at December 31, 2024. The persistent rise in debt stock is attributed to new borrowings by the Federal Government and the depreciation of the naira, which inflated the local currency value of external loans.
This surge comes against a backdrop of persistent fiscal pressures and continued reliance on both domestic and foreign borrowing to fund public expenditure.
