The Nigerian Economic Summit Group has cautioned that despite recent improvements in key fiscal indicators, Nigeria still faces considerable debt risks, pointing to weak revenue mobilisation, deep-rooted structural imbalances, and ongoing reliance on borrowing to fund budget deficits and maintain public spending.

The policy advocacy organisation made this known in its latest review of Nigeria’s public finance outlook, titled “Debt Pressure Persists Beneath Surface Stability: DBI Signals Elevated Fiscal Strain in 2025.”

According to the NESG, while certain debt metrics showed improvement between 2024 and 2025, the country’s overall fiscal position remains fragile and vulnerable to sustained debt pressures.

The NESG stated that Nigeria’s Debt Burden Index, a broader indicator designed to evaluate debt stress beyond traditional debt ratios, fell to 70.9 points in 2024, down from 83.6 points in 2023.

However, the group warned that the drop should not be seen as a sign of any significant improvement in the country’s overall fiscal health.

According to the NESG, the reduction was largely attributable to a temporary easing of debt-servicing pressures, rather than any substantial gains in fiscal capacity, stronger revenue mobilisation, or meaningful structural reforms.

“Overall, the 2024–2025 transition does not yet reflect a decisive shift toward debt sustainability. Rather, it signals a system making only marginal adjustments, with improvements in headline ratios masking persistent structural imbalances,” the report stated.

The Nigerian Economic Summit Group added that the rising debt-to-GDP ratio underscores the country’s continued dependence on borrowing to fund recurring fiscal deficits.

Nigeria’s debt position has faced growing scrutiny in recent years, as debt-servicing costs increasingly account for a substantial share of government revenues.

The Nigerian Economic Summit Group noted that structural weaknesses — including poor revenue mobilisation, low tax efficiency, rising recurrent expenditure, exchange rate pressures, subsidy reforms, and inflation-driven spending demands — continue to erode the country’s fiscal stability.

The group emphasised that the contrast between a declining Debt Burden Index and a rising debt-to-GDP ratio underscores deeper fiscal vulnerabilities within the economy.

“The 2025 DBI trajectory reinforces concerns. Quarterly estimates show that the DBI remains elevated and volatile, rising to 78.4 points in Q1 and peaking at 79.6 points in Q2, before moderating to 76.2 points in Q3 and closing the year at an estimated 79.2 points in Q4,” the report noted.

The NESG warned that without meaningful reforms to boost revenue generation and curb fiscal leakages, Nigeria’s debt burden could continue to threaten long-term economic growth.

It added that rising debt-servicing obligations are constraining fiscal space for critical infrastructure and social investments, while weak revenue mobilisation remains a significant obstacle to achieving fiscal sustainability.

The Debt Management Office reported that Nigeria’s total public debt rose to N159.28 trillion as of December 31, 2025.