The Nigerian government is planning a staggering N31.24 trillion in fresh borrowings over the next three years, with projections indicating that the country’s total debt could soar to nearly N170 trillion by 2027.
This is according to the newly approved 2025-2027 Medium-Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP), which outlines a dramatic increase in borrowing to fund budget deficits and other expenditure needs.
The nation’s debt stock, which stood at N134.3 trillion as of June 2024, is expected to rise substantially with the government borrowing N9.22 trillion in 2025, followed by N8.78 trillion in 2026, and N13.24 trillion in 2027.
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The overwhelming majority of these borrowings will be domestic, with N24.98 trillion earmarked for domestic debt, while foreign loans will contribute N6.25 trillion.
The planned borrowings aim to cover projected budget deficits, which are expected to be N13.08 trillion in 2025, N12.14 trillion in 2026, and N13.76 trillion in 2027.
One of the most concerning elements of the MTEF is the allocation for debt servicing, which is set to outstrip capital expenditure in the coming years. Between 2025 and 2027, Nigeria will allocate a total of N50.39 trillion for debt servicing, compared to N48.93 trillion for capital projects.
In 2025 alone, N15.38 trillion will be spent on debt servicing, while capital expenditure will receive N16.48 trillion. However, by 2027, debt servicing is projected to climb to N19.49 trillion, while capital expenditure will rise only modestly to N16.51 trillion.
This disparity is a major concern for economists, who warn that such a heavy emphasis on debt servicing will further strain government resources, leaving less room for critical investments in infrastructure and development.
The rising costs of debt servicing are expected to increase from 34.06 percent of total government expenditures in 2025 to 37.2 percent by 2027.
Prof. Adeola Adenikinju, President of the Nigerian Economic Society, expressed concerns about the sustainability of this debt strategy, highlighting the consequences of years of fiscal mismanagement.
“Debt servicing will not do anything positive for the economy,” he stated. “It will not improve infrastructure, nor enhance economic growth. It is simply a result of our wasteful past.”
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Dr. Alias Aliyu, a development economist, also criticized the government’s fiscal priorities, urging that capital expenditure should exceed debt servicing, as it directly benefits Nigerians through improvements in education, healthcare, and infrastructure.
The head of research at SBM Intelligence, Ms. Bunmi Bailey, further pointed out that Nigeria’s focus on servicing debt at the expense of capital investment will undermine the country’s economic development.
She emphasized the need for increased investment in critical sectors such as education, health, and infrastructure to stimulate economic growth and create a productive workforce.
