Nigeria’s rising debt worries have persisted despite subsidy removal and FX reforms.
NewsOnline Nigeria reports that concerns are mounting over Nigeria’s worsening debt profile, even after major fiscal reforms such as the removal of fuel subsidies and the liberalization of the foreign exchange market.
Murtala Sabo Sagagi, a member of the Central Bank of Nigeria’s (CBN) Monetary Policy Committee (MPC), raised the alarm in his personal statement following the 301st MPC meeting, published Sunday on the CBN website.
According to Sagagi, government spending has become more reckless despite earlier policy adjustments aimed at stabilizing the economy.
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“Even with the removal of fuel subsidy and liberalization of the exchange rates, the appetite for unfettered spending by the government has grown even stronger,” he said.
Figures from the Debt Management Office (DMO) reveal that Nigeria’s total public debt climbed from N144.67 trillion in December 2024 to N149.39 trillion by March 2025 — a staggering increase of N4.7 trillion in just three months.
Naira Projection at N1400/$1 by Year-End
Despite the debt surge, Sagagi expressed optimism about the naira’s trajectory, projecting an appreciation to N1400/$1 by December 2025, citing higher crude oil production, fresh capital inflows, and an improved balance of payments.
His projection marks an upgrade from his earlier forecast of N1450/$1 made after the 300th MPC meeting. The naira closed at N1,503.5/$1 in the official market last Friday, according to Nairametrics.
Calls for Sustained Monetary Tightening
In a related view, another MPC member, Lamido Abubakar Yuguda, urged the apex bank to continue its tight monetary stance to rein in inflation.
“MPC should sustain its focus on fighting inflation by maintaining the current tight monetary policy stance until inflation declines to a more reasonable level,” Yuguda stated.
He noted that rebased GDP data from the National Bureau of Statistics (NBS) showed 3.38% growth in 2024, while the composite Purchasing Managers’ Index (PMI) rose to 52.3 in June 2025, indicating positive momentum across agriculture, industry, and services.
More Borrowing Ahead?
Fresh warnings from CSL Stockbrokers Limited, a subsidiary of FCMB Group Plc, suggest that Nigeria’s debt could rise to N160.6 trillion by December 2025, with the Federal Government expected to borrow at least N9.3 trillion more in the second half of the year.
If this materializes, the country’s debt stock could hit 50.2% of the pre-rebased GDP, deepening fiscal vulnerabilities.
President Bola Tinubu had earlier pledged to stabilize the exchange rate at N1,500/$1 by the end of 2025 to ensure smooth budget execution.
