Financial analysts at Afrinvest have raised fresh concerns over Nigeria’s ballooning public debt, projecting that the country’s total debt stock could hit N180tn by the end of 2025 if the current fiscal trends persist.
This projection is contained in the latest Afrinvest Weekly Market Report, which reviewed key insights from the World Bank’s Nigeria Development Update titled Building Momentum for Inclusive Growth and recent data released by the National Bureau of Statistics.
According to the Afrinvest report, while the World Bank acknowledged that Nigeria’s macroeconomic situation is improving, thanks to reforms in foreign exchange, monetary policy, and fiscal management, the sustainability of these gains remains questionable. Afrinvest warned that weak oil earnings and rising expenditure could derail fiscal stability.
“There is a high possibility that budget deficits for the year could exceed N17.0tn, pushing total debt stock to N180.0tn levels (approximately 65.0 per cent of GDP) from the 2024 year-end position of N144.7tn,” the report stated.
The firm highlighted that the current crude oil production level of 1.49 million barrels per day as of April still falls short of the budget benchmark of 2.06 million barrels per day.
Similarly, crude oil prices remain below projections at an average of $64.00 per barrel, compared to the budgeted $75 per barrel.
Afrinvest noted that this production and pricing shortfall could lead to a 37.9 per cent deviation from the projected oil revenue of N19.5tn.
Despite these concerns, the report acknowledged improvements recorded in 2024, including a $6.8bn balance of payment surplus and a 110 per cent year-on-year surge in foreign portfolio inflows from $6.4bn in 2023 to $13.4bn in 2024.
Afrinvest attributed this capital inflow to the Central Bank of Nigeria’s hawkish monetary stance, including a cumulative 875 basis points increase in the Monetary Policy Rate to 27.50 per cent and issuance of over N10.2 trillion in Open Market Operations bills, which attracted investor interest.
In addition, Nigeria’s gross revenue collection was estimated to rise from N16.8tn in 2023 to N31.9tn in 2024, a 89.9 per cent increase boosted by Value Added Tax collections and windfall gains from FX-denominated oil receipts following exchange rate liberalisation.
Nevertheless, inflation remains a concern. Although headline inflation eased to 23.7 per cent in April 2025 following the rebasing of the Consumer Price Index, the World Bank projects an annual average of 22.0 per cent in 2025, with the high base effect and tight monetary policy expected to moderate price pressures.
Afrinvest concluded by calling on the Federal Government to take urgent steps to consolidate economic gains adding that to sustain the current macroeconomic gains, the Federal Government should focus on deploying increased revenues towards critical infrastructure development, addressing insecurity to enhance productivity in the agricultural sector, curbing crude oil theft to meet production benchmarks, and reducing the cost of governance as a strategic measure to manage the country’s rising debt burden.
“With the gains made from PMS, electricity, and FX subsidy removals, there is no better time than now for the government to double down on building sustainable growth frameworks,” the report emphasised.
