Nigeria’s public debt-to-Gross Domestic Product (GDP) ratio has declined to 39.4 per cent in the first quarter of 2025, following the National Bureau of Statistics’ (NBS) GDP rebasing exercise that expanded the country’s economic output. The rebasing, which updated the base year from 2010 to 2019, incorporated previously underreported sectors such as digital technology, creative industries, fintech, and informal economic activities, reflecting a more diversified economy.
The latest figures show that as of March 31, 2025, Nigeria’s total public debt stood at ₦149.39 trillion, comprising ₦78.76 trillion in domestic debt and ₦70.63 trillion in external borrowings. With the newly rebased GDP now valued at ₦379.17 trillion (covering Q2 2024 to Q1 2025), Nigeria’s debt ratio has improved significantly, falling just below the 40 per cent ceiling set by the Federal Government and well within the 55 per cent sustainability threshold recommended by the World Bank and IMF.
The breakdown of the new debt ratio reveals that domestic debt accounts for 20.77 per cent of GDP, while external debt stands at 18.63 per cent. The figure marks an improvement from the 52.13 per cent ratio recorded before the rebasing exercise, when Nigeria’s GDP was estimated at ₦277.49 trillion. Following the rebasing adjustment, the GDP was revised to ₦372.82 trillion, reducing the ratio to 38.8 per cent at the end of December 2024.
However, despite the improved debt sustainability indicators, Nigeria’s public debt continues to rise. Compared to Q1 2024, the debt stock grew by ₦27.72 trillion (22.8 per cent year-on-year), and by ₦4.72 trillion (3.3 per cent quarter-on-quarter) from ₦144.67 trillion in December 2024. Analysts caution that while the rebasing improves fiscal indicators on paper, the real burden of debt servicing and foreign exchange pressures remains a significant challenge, particularly given Nigeria’s weak revenue performance and volatile naira.
The rebasing has strengthened Nigeria’s status as a major African economy, increasing its nominal GDP by about $64 billion. However, it remains Africa’s fourth-largest economy, behind South Africa ($400.26bn), Egypt ($389.05bn), and Algeria ($263.61bn), according to World Bank data. Nigeria’s economy is now estimated at $251 billion, edging closer to Algeria but still lagging behind the top three.
This outcome contrasts with Nigeria’s last rebasing in 2014, which propelled the country to the top of Africa’s economic rankings by expanding the GDP base to include fast-growing sectors such as telecommunications, ICT, Nollywood, and aviation, pushing total output to ₦80.3 trillion ($509.9bn) at the time.
The Federal Government has welcomed the rebasing as a positive development for fiscal policy, arguing that it offers greater headroom for strategic borrowing to finance infrastructure and social investments. Economic analysts, however, warn against excessive reliance on debt despite the improved ratios, stressing that debt servicing already consumes more than 60 per cent of government revenue.
Fiscal experts also argue that the rebasing highlights Nigeria’s economic potential in the technology and informal sectors, urging policymakers to prioritize tax reforms and broaden the revenue base rather than increasing borrowings.
The government has pledged to leverage the updated GDP data to attract foreign investments, negotiate better credit terms with lenders, and position Nigeria for sustainable growth. With President Bola Tinubu’s administration pushing for a $1 trillion economy target, stakeholders insist that diversification, exchange rate stability, and structural reforms are essential to fully unlock the country’s economic potential.
If successfully implemented, these reforms—alongside stronger fiscal discipline—could turn the rebasing gains into tangible economic growth, reduce overreliance on borrowing, and strengthen Nigeria’s position as a leading investment destination in Africa.