Nigeria’s total public debt is projected to hit N160.6 trillion by December 2025, raising fresh concerns over the country’s escalating fiscal vulnerabilities. This forecast is detailed in the latest H2 2025 Economic Outlook report released by CSL Stockbrokers Limited, a subsidiary of FCMB Group Plc.
The report warns that the Federal Government may borrow an additional N9.3 trillion or more in the second half of the year to finance a widening fiscal deficit. This surge in borrowing could push the nation’s public debt stock to approximately 50.2% of the pre-rebased Gross Domestic Product (GDP).
“We expect the government to intensify its borrowing efforts in the latter half of the year to bridge the expanding fiscal gap,” the report stated. “This could see the total public debt rise to at least N160.6 trillion by year-end.”
**Oil Revenue Shortfalls and Delayed Tax Reforms Worsen Fiscal Pressures**
CSL’s forecast highlights growing concerns about Nigeria’s fiscal trajectory amid weak oil revenues and stalled tax reforms. While the 2025 budget initially projected a fiscal deficit of 3.9% of GDP, the report anticipates this gap could widen to 5.8%, driven by shortfalls in both oil and non-oil revenue streams.
Nigeria has struggled to meet its 2025 oil production target of 2.06 million barrels per day, averaging just 1.67 million barrels daily between January and May. This underperformance, coupled with oil prices averaging $70.82 per barrel—below the government’s $75 benchmark—has significantly dented projected earnings from the country’s primary revenue source.
The non-oil sector faces similar challenges. Plans to increase the Value Added Tax (VAT) rate from 7.5% to 10% have stalled due to legislative opposition, while the implementation of new tax laws has been deferred until 2026, limiting near-term revenue growth.
The report also flagged concerns regarding the Nigerian National Petroleum Company Limited’s (NNPC) revenue remittance. Currently, NNPC is reportedly remitting only about half of the savings from the removal of fuel subsidies to the Federation Account, further tightening fiscal space.
**Borrowing to Continue Amid Fiscal Constraints**
To cover the widening deficit, the government is expected to increase borrowing from both domestic and international markets. CSL referenced a recently submitted $25 billion medium-term borrowing plan, which includes foreign-currency-denominated local debt instruments.
There is also speculation that Nigeria may return to international capital markets to refinance a Eurobond maturing in November.
Despite the rising debt stock, Nigeria’s debt-to-GDP ratio could show a slight decline to 50.7% by year-end, largely due to planned GDP rebasing. However, CSL cautions that this statistic masks deeper concerns over debt sustainability.
**Key Figures**
– Nigeria’s total public debt stood at N149.39 trillion as of March 31, 2025, marking a 22.8% year-on-year increase from N121.67 trillion recorded in March 2024.
– The figure also reflects a 3.3% quarter-on-quarter rise of N4.72 trillion from N144.67 trillion as of December 31, 2024, according to the Debt Management Office (DMO).
– The rising debt reflects new borrowings to finance budget deficits and the naira’s depreciation, which has increased the local currency cost of external debt.
As fiscal pressures mount, the government’s growing reliance on borrowings to fund infrastructure, debt servicing, and recurrent expenditure underscores the urgent need for sustainable fiscal reforms.
