Stronger naira masks rise in Nigeria's public debt to N159.35 trillion

Nigeria’s total public debt rose to N159.35 trillion as of March 31, 2026, marking a modest increase from the previous quarter but a significant jump over the past year, as the Federal Government continued to rely on domestic borrowing despite a stronger naira reducing the local currency value of external debt.

According to the latest figures released by the Debt Management Office (DMO), total public debt stood at N159.35 trillion ($114.95 billion) at the end of the first quarter of 2026, up from N159.28 trillion ($110.97 billion) recorded at the end of December 2025. Compared to N149.39 trillion ($97.24 billion) in March 2025, Nigeria’s debt stock increased by N9.96 trillion, representing a 6.67% year-on-year growth.

While the naira value of total debt increased by only N75.51 billion (0.05%) over the three-month period, the dollar value rose by $3.98 billion (3.59%), reflecting additional borrowing that was partly offset by the appreciation of the naira during the quarter.

Domestic debt remained the dominant component of Nigeria’s debt portfolio, accounting for 54.85% of total public debt, while external debt represented 45.15%.

What the data shows

The latest data shows domestic borrowing accounted for virtually all the increase in Nigeria’s debt stock during the first quarter.

Total domestic debt rose from N84.85 trillion in December 2025 to N87.40 trillion in March 2026, representing an increase of N2.55 trillion or 3.01% within three months. Compared with N78.76 trillion recorded in March 2025, domestic debt expanded by N8.64 trillion or 10.98% over one year.
The Federal Government accounted for most of the increase, with its domestic debt rising from N80.49 trillion to N82.88 trillion during the quarter, an increase of N2.39 trillion (2.97%). Year-on-year, FGN domestic debt increased by N7.99 trillion (10.67%) from N74.89 trillion.

A closer look at the debt instruments shows that Nigerian Treasury Bills recorded the sharpest increase.

Outstanding Treasury Bills climbed from N13.85 trillion in December 2025 to N16.57 trillion by March 2026, representing an increase of N2.71 trillion or 19.6% within three months. Compared with N12.70 trillion a year earlier, Treasury Bills expanded by N3.87 trillion or 30.45%, raising their share of the Federal Government’s domestic debt portfolio from 17.21% in December to 19.99% in March.
In contrast, total FGN Bonds declined marginally by N179.25 billion (0.28%) quarter-on-quarter to N63.45 trillion, although they remained 6.12% higher than the N59.80 trillion recorded in March 2025.

The stock of FGN Sukuk remained unchanged at N1.19 trillion during the quarter but was 20.15% higher than the previous year.

Savings Bonds increased by 11.39% quarter-on-quarter to N116.21 billion, while Green Bonds remained unchanged at N62.36 billion during the quarter. However, the Green Bond stock was more than four times the N15 billion outstanding a year earlier.

Meanwhile, Promissory Notes declined by 10.28% during the quarter to N1.39 trillion, though they remained 6.46% higher than the March 2025 level.

Debt owed by states and the Federal Capital Territory also increased from N4.36 trillion in December to N4.52 trillion in March, representing a quarterly increase of 3.74%, while year-on-year growth stood at 16.92%.

Stronger naira reduces external debt valuation

Unlike domestic debt, Nigeria’s external debt remained largely stable in dollar terms but declined in naira terms because of exchange rate movements.

The country’s external debt rose marginally from $51.86 billion in December 2025 to $51.90 billion in March 2026, representing an increase of just $48.05 million or 0.09%. Compared with $45.98 billion recorded in March 2025, however, external debt increased by $5.93 billion or 12.9%.
In naira terms, external debt declined from N74.43 trillion at the end of December to N71.95 trillion in March, representing a reduction of N2.48 trillion or 3.33%.
The decline was driven by exchange rate gains rather than debt repayments. The DMO converted external debt using the Central Bank of Nigeria’s official exchange rate of N1,386.22/$ at the end of March 2026, compared with N1,435.26/$ at the end of December 2025.

Multilateral lenders remained Nigeria’s largest external creditors, accounting for $23.86 billion or 45.96% of total external debt. Bilateral debt stood at $6.59 billion (12.69%), while Eurobonds accounted for $18.55 billion, representing 35.73% of the external debt portfolio. Syndicated loans and other commercial facilities totalled $2.86 billion, or 5.51%.

The International Development Association (IDA) remained Nigeria’s largest multilateral creditor with $18.39 billion outstanding, while China Exim Bank continued to be the country’s biggest bilateral lender with $4.95 billion in outstanding loans.

What you should know

The first-quarter data points to a gradual shift in Nigeria’s debt composition toward domestic borrowing.

Domestic debt increased its share of total public debt from 53.27% in December 2025 to 54.85% by March 2026, while external debt’s share declined from 46.73% to 45.15%.
Although headline public debt increased by only 0.05% during the quarter, the underlying data suggests a more active borrowing profile. The Federal Government raised an additional N2.55 trillion from the domestic market, particularly through Treasury Bills, while the stronger naira reduced the local currency valuation of external obligations by about N2.48 trillion, effectively offsetting most of the increase in total debt.
The one-year trend was more pronounced. Between March 2025 and March 2026, Nigeria’s public debt increased by N9.96 trillion, with domestic debt accounting for approximately 87% of the increase.

Nairametrics earlier reported that the Federal Government increased its planned borrowing for 2026 to N29.20 trillion following an expansion in the proposed budget size and fiscal deficit, according to official documents reviewed by Nairametrics.

The new borrowing figure was an increase of N11.31 trillion compared to the earlier projection of N17.89 trillion contained in the 2026 Abridged Budget Call Circular issued in December 2025.