Nigeria’s debt stock is projected to surge to N187.79 trillion by 2025, fueled by escalating borrowing costs and substantial budget deficits. This steep increase poses significant risks to the country’s fiscal stability, with potential repercussions for public services and economic growth.
The mounting debt is primarily driven by the government’s reliance on borrowing to bridge deficits in its budget. Analysts warn that the rising debt burden could lead to higher taxes and reduced public spending, particularly in critical sectors such as infrastructure development and social services.
Economic experts have raised concerns about the long-term implications of this debt trajectory. They argue that continued borrowing without sufficient fiscal reforms could result in economic instability and a decline in investor confidence. The strain on government finances may also limit the country’s ability to fund essential projects and services, further impacting the standard of living for Nigerians.
To address this looming crisis, analysts recommend that the government prioritize fiscal reforms, enhance revenue generation mechanisms, and adopt more prudent spending practices. Diversifying the country’s revenue base, particularly by improving non-oil revenues, is seen as crucial to reducing dependency on borrowing.
Additionally, calls for better accountability in public spending have intensified, with stakeholders urging the government to ensure borrowed funds are efficiently utilized for developmental projects that yield measurable economic benefits.
If unaddressed, Nigeria’s growing debt could undermine its economic stability and hinder progress in achieving long-term development goals. With the debt stock expected to reach unprecedented levels, urgent and strategic action is required to avert a fiscal crisis and restore confidence in the country’s financial management.
The government’s ability to navigate this challenge effectively will be critical in ensuring sustainable growth and economic stability for Africa’s largest economy.
