Nigeria’s public debt hit N159.35tn in March — DMO
Nigeria's total public debt reached N159.35tn by March 2026, marking an increase of nearly N10tn within a year, according to the Debt Management Office (DMO). This rise reflects a significant shift towards domestic borrowing.
Intelligence analysis by Gemini 2.5 Flash
The Debt Management Office reported Nigeria's public debt surged to N159.35tn by March 2026, a N9.96tn increase from the previous year. While the naira value of external debt decreased due to exchange rate appreciation, overall debt grew, primarily driven by a substantial rise in domestic borrowing, which now constitutes over 54% of the total portfolio.
Imagine your country is like a big family, and sometimes it needs to borrow money to build roads or schools. Well, Nigeria's family debt grew to a really big number, N159.35 trillion, in just one year! Most of this new money was borrowed from people and banks inside Nigeria, not from other countries. Even though the Nigerian money (Naira) got a bit stronger against the US dollar, which made the debt from other countries look a little smaller, the overall borrowing kept going up, especially through special short-term loans called Treasury Bills.
Analysis
Nigeria's public debt trajectory continues to be a critical economic indicator, with the latest figures from the Debt Management Office (DMO) revealing a substantial increase to N159.35tn by March 2026. This represents a N9.96tn or 6.67 percent rise from N149.39tn recorded in March 2025. The data underscores persistent fiscal pressures and the government's ongoing reliance on borrowing to finance its operations and development initiatives. The composition of this debt also highlights a notable shift, with domestic obligations gaining increasing prominence within the overall debt portfolio.
N159.35tn
The total public debt reaching N159.35tn signifies a considerable financial burden on the Nigerian economy. This figure encompasses both domestic and external obligations of the Federal Government, states, and the Federal Capital Territory. The year-on-year increase of nearly N10tn indicates a rapid accumulation of debt, raising concerns about sustainability and the cost of debt servicing. Such high debt levels can crowd out private sector investment, as government borrowing competes for available capital, potentially stifling economic growth and job creation in the long run. The DMO's role in managing this growing liability becomes increasingly crucial in navigating these complex financial waters.
Exchange Rate
The interplay between the naira and dollar movements in debt valuation presents a nuanced picture. While the overall debt increased, the naira equivalent of external debt actually declined by N2.48tn between December 2025 and March 2026, despite a slight increase in dollar terms. This divergence is attributed to an appreciation of about 3.42 percent in the Central Bank of Nigeria's official exchange rate used for debt conversion. The DMO used N1,386.2156/$ in March 2026 compared to N1,435.2571/$ in December 2025. This exchange rate effect partially masked the true extent of external borrowing when viewed in local currency, demonstrating how currency fluctuations can significantly impact reported debt figures and the perceived burden on the national budget.
Treasury Bills
A significant driver of the recent increase in domestic debt has been the surge in Treasury Bills. The outstanding value of Nigerian Treasury Bills jumped by N2.71tn or 19.60 percent in just three months, from N13.85tn in December 2025 to N16.57tn in March 2026. This instrument's share of Federal Government domestic debt consequently rose to 19.99 percent. This reliance on short-term instruments like Treasury Bills can indicate a government's need for quick financing, but it also exposes the treasury to refinancing risks and potentially higher interest rates in the future. While FGN bonds remain the largest domestic debt instrument, the rapid expansion of Treasury Bills points to a strategic or necessity-driven shift in the government's domestic borrowing strategy.
Key points
- Nigeria's total public debt reached N159.35tn by March 2026, an increase of N9.96tn (6.67%) from March 2025.
- Domestic debt now accounts for 54.85% of the total public debt, up from 52.72% a year prior.
- The naira value of external debt decreased by N2.48tn due to an appreciation in the official exchange rate used for conversion.
- Federal Government domestic debt increased by N7.99tn (10.67%) within one year, reaching N82.88tn.
- Nigerian Treasury Bills saw a significant jump of N2.71tn (19.60%) in three months, becoming a key driver of domestic borrowing.
The appreciation of the naira against the dollar, as reflected in the DMO's conversion rate, offers a temporary relief by reducing the naira equivalent of external debt. If this trend of currency stability or appreciation continues, it could ease the burden of external debt servicing in local currency terms, potentially freeing up funds for other critical government expenditures.
The continuous rise in public debt, particularly the increasing reliance on domestic borrowing, could lead to higher interest rates, making it more expensive for the government to borrow in the future. This might crowd out private sector investment, slow economic growth, and increase the risk of fiscal instability if debt servicing costs become unsustainable.
