Economists and development researchers at the Centre for the Study of Economies of Africa (CSEA), a leading think-tank with special focus on the developments in Sub-Saharan Africa’s (SSAs’) economies, have charged the federal and state governments in Nigeria to ensure that borrowed funds are deployed to productive sectors for job creation and sustainable growth of the nation’s economy.
The experts, in the firm’s ‘Nigeria Economic Update Issue 40’ edition circulated to our correspondent on Friday, noted that based on the latest ‘Nigeria’s Domestic and Foreign Debt Q2 2026’ report by the National Bureau of Statistics (NBS), the nation’s public debt stock surged to N166.79 trillion (US$120.93 billion), up from N159.35 trillion (US$114.95 billion) in Q1 2026, representing a quarter-on-quarter growth of 4.67%.
According to the report, Nigeria’s total external debt stood at N75.20 trillion, while total domestic debt was N91.59 trillion, while domestic debt accounted for 54.91% of total public debt, compared with 45.09% for external debt.
The Bureau clarified that at the state level, Lagos recorded the highest domestic debt in Q2 2026 at N1.20 trillion, followed by Delta (N369.30 billion), while Jigawa (N1.04 billion) had the lowest, followed by Ondo (N6.16 billion).
- Advertisement -
Worried by the rising debt stock at national and sub-national levels of government, the CSEA experts expressed concern that the continued increase in public debt, particularly the larger share of domestic debt, and called for stronger fiscal discipline and more prudent borrowing decisions.
Specifically, the analysts advocated: “The government should ensure that borrowing is directed towards productive investments with clear economic returns and measurable outcomes, while strengthening fiscal planning to align borrowing with the capacity to meet future debt obligations.
“At the state level, governments with high domestic debt should strengthen debt management and prioritise expenditures that support economic activity and revenue generation. Greater coordination in public debt management and closer monitoring of borrowing at both the federal and state levels would also help contain further debt accumulation and support debt sustainability”, they added.
Despite claims by the Federal Government that Nigeria’s debt stock remained sustainable, many experts, development finance institutions and ratings agencies have consistently expressed concerns about the surging rate of the nation’s borrowings, especially based on the rising unemployment and macroeconomic challenges in the country.
