Nigeria fiscal debt warning as experts say election spending could weaken reforms, with public debt hitting N159tn and rising sustainability risks
Nigeria’s fiscal outlook has been described as increasingly fragile, with economic experts warning that the 2026 to 2027 election cycle could trigger a sharp rise in government spending and undermine recent debt stabilisation efforts.
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The warning is contained in the latest Coronation Economic Note on the Q4 2025 Debt Report, which shows that Nigeria’s total public debt has climbed to a record ₦159.28 trillion, raising fresh concerns about long term fiscal sustainability.
While official figures suggest the country’s debt-to-GDP ratio remains within manageable levels, analysts argue that the headline indicator masks deeper structural weaknesses in revenue generation and debt servicing capacity.
The report describes Nigeria’s fiscal position as a “critical paradox”, noting that the government’s ability to meet its obligations is increasingly under pressure despite apparent macroeconomic stability on paper.
A key concern highlighted is the debt-service-to-revenue ratio, which reportedly reached an alarming 113 per cent in early 2025, suggesting that the Federal Government is now spending more on debt repayments than it earns in total revenue.
According to the analysis, this trend indicates that Nigeria is no longer servicing debt from revenue inflows but is instead rolling over obligations through additional borrowing, creating what it describes as a self-reinforcing debt cycle.
The report further notes that despite an estimated ₦109 trillion increase in total debt over the past three years, fiscal stability has largely been maintained through continuous borrowing rather than structural revenue expansion.
Although the International Monetary Fund projects Nigeria’s debt-to-GDP ratio could fall to 32.3 per cent by 2026, analysts caution that the figure does not reflect the country’s weak revenue base, which remains significantly below peer economies across Africa.
Nigeria’s tax-to-GDP ratio, estimated at 9 to 10 per cent, lags behind countries such as South Africa, Kenya and Ghana, reinforcing concerns that revenue weakness, rather than debt size, is the core challenge.
Recent approval of a $6 billion external borrowing plan by the National Assembly has further intensified debate over the government’s reliance on debt financing amid rising fiscal pressures.
Experts argue that without urgent and aggressive revenue mobilisation reforms, Nigeria risks deeper fiscal strain, particularly as election-related spending pressures begin to mount.
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The report concludes that effective enforcement of the Fiscal Responsibility Act and a shift toward capital-focused borrowing are critical to preventing a potential fiscal crisis as the country approaches a politically sensitive period.
