A recent 15.6 per cent decline in Nigeria’s promissory note debt, as reported by the Debt Management Office (DMO), is sparking renewed scrutiny over the Federal Government’s debt transparency and fiscal accountability. While government officials tout the reduction as a sign of improved debt management, fiscal analysts and stakeholders are raising red flags, demanding greater clarity on the processes behind the numbers.
According to the DMO, the total value of Nigeria’s outstanding promissory notes dropped from ₦1.542 trillion in December 2024 to ₦1.301 trillion by March 2025. This reduction, the agency claims, reflects the government’s effort to settle verified obligations owed to contractors, exporters, and other claimants, thereby restoring trust in the system.
However, some experts are not convinced. In a widely circulated commentary, Dr. Marcel Mbamalu, publisher of Prime Business Africa, questioned the motive and mechanisms behind the reported decline. He expressed concern that the apparent fiscal discipline could be masking delays in project execution or the quiet abandonment of essential capital infrastructure.
“Is this drop a genuine sign of improved fiscal discipline and debt management, or does it mask deeper issues such as the deferral or abandonment of critical capital projects?” Mbamalu asked.
Promissory notes, commonly used by governments to defer payments for goods and services already rendered, are effectively IOUs that indicate future obligations. As such, a reduction in these liabilities can be a positive development—if achieved through transparent and sustainable means.
But against the backdrop of Nigeria’s rising total public debt of ₦149 trillion, driven by currency depreciation, growing interest payments, and persistent borrowing, stakeholders are skeptical. There are calls for an independent audit and stronger legislative oversight to determine whether the decline is truly a result of debt servicing or an accounting sleight-of-hand.
Mbamalu emphasized that while debt control is necessary, it must not come at the expense of Nigeria’s development ambitions.
“Fiscal health cannot and must not come at the expense of Nigeria’s long-term growth and the well-being of its people,” he warned. “The government must balance debt control with the need to deliver essential capital projects.”
Transparency advocates are particularly concerned about the lack of detail in the DMO’s disclosure, especially regarding the specific obligations that were cleared and the process for verifying claims. In a fiscal environment already marred by opacity and rising citizen distrust, such gaps only fuel speculation and weaken investor confidence.
Experts now call on the Federal Government to:
Publish a breakdown of promissory note redemptions by sector and beneficiary.
Ensure independent verification of cleared obligations.
Institutionalize third-party audits of all debt instruments, including promissory notes.
Prioritize transparency in public debt reporting.
As the 2025 fiscal year progresses, stakeholders say the government must adopt a more transparent and participatory debt management strategy. Without this, the apparent decline in liabilities might only paper over deeper fiscal challenges.