The public debt burden in Nigeria, By Michael Toyo

The DMO should publish the external debt stock, loan by loan, with the lender, date, terms and purpose of each facility, and publish the states and amounts involved whenever it restructures the debts of states. Every loan and bond should close with a public completion record that is independent of the agency that spent the money. Bond issuers, the Federal Government included, should publish the projects each issue will fund and report on them until the bond matures, and should not allocate money to works that official records already describe as finished.

Between 30 September 2025 and 31 March 2026, the domestic debt of the Federal Capital Territory (FCT) rose from ₦78.93 billion to ₦389.88 billion, according to the Debt Management Office (DMO). That is about ₦311 billion in six months, or roughly ₦1.7 billion a day. The FCT Administration has put the increase down to more infrastructure work. However, there is no document, from the Administration or anyone else, that says who lent it the money, on what terms, with whose approval, or for which projects.

The FCT case is extreme, but it is not unusual. Loans in Nigeria are announced, approved and signed in public, often with a ceremony. What happens to the money afterwards is seldom written down anywhere an ordinary citizen can find it, and in cases like the FCT’s, even the borrowing itself is hard to see. Nigeria borrows in public but accounts for this in private. For most of our debts, the public records stop at the level of approval.

That is not what the law intends. Section 44(1) of the Fiscal Responsibility Act 2007 says any government in the federation that wants to borrow must specify the purpose of the borrowing and present a cost-benefit analysis detailing its economic and social benefits. If the purpose has to be stated before the loan is taken, there ought to be a record afterwards of whether this was achieved.

At the Center for Fiscal Transparency and Public Integrity (CeFTPI), we set out to build that record. The result is the Public Debt Integrity, an open database of Nigerian public borrowing and utilisation. The project aims to foster better accountability for public debts, so that every loan can be traced from the point of approval to what it built. It covers the foreign loans and domestic bonds of the Federal Government, the 36 states and the FCT, and ties every grade to the document it rests on. Where the record is silent, the database would say so rather than fill the gap. We would work from the lenders’ own registers, including those of the World Bank and the African Development Bank (AfDB), and from the DMO’s debt reports, bond and Sukuk offer documents, state budgets and audited accounts, and progress records of the Federal Ministry of Works. Each loan is graded by the same test: Does the public record show that the money was used for what it was borrowed for? We count a project as completed only where an independent official record says so. A borrower’s word about its own project is not enough.

Of 448 foreign loans to the Federal Government, the 36 states and the FCT worth $98.75 billion, where a dollar amount is stated, only 138, or 31 per cent have independent records of completion. For 241, or 54 per cent, the use of the money is not established, and 168 of those, worth $23.90 billion, have already ended. On the domestic side, it is worse. Of the 601 projects named in domestic bond and loan documents, 26 have records of completion. A low grade is a statement about the evidence, not about any official’s conduct. A loan graded “INSUFFICIENT” may well have been put to good use, but the trouble is that nobody can show it.

The Shomolu General Hospital in Lagos shows what the gaps look like up close. A Lagos State bond document of May 2023 listed the rehabilitation of the hospital as a ₦18.0 billion project, with nothing paid and the work at 0 per cent complete. The Series IV bond document of 20 November 2025 describes it as a ₦43.56 billion new hospital, with ₦12,001,840,630.57 recorded as paid to date, but the work still at 0 per cent completion. That same bond allocates a further ₦4.89 billion to the project.

The size of the debt makes all this more serious. The total public debt was ₦166.79 trillion on 30 June 2026, up from ₦17.36 trillion at the end of 2016. Some of that increase came from the securitisation of ₦22.71 trillion in Central Bank Ways and Means advances in 2023, and some from the fall of the naira, but most of the rest is new borrowing. Ten states now owe more than a full year’s revenue. Kaduna’s debt stands at 336.7 per cent of its 2025 revenue, and only five states and the FCT are at or below the 50 per cent guideline the Fiscal Responsibility Commission has cited from the DMO.

At the federal level, a $399.5 million loan from the Export-Import Bank of China paid for the National Public Security Communication System in Abuja and Lagos. The loan was fully disbursed and the network was installed from 2011. In July 2023, the Ministry of Police Affairs said the system had been dormant, partly vandalised and would have to be concessioned for repair.

On the Sokoto-Tambuwal-Jega-Kontagora-Makera road, the Ministry of Works records the commissioning and handover of Phases I and II on 25 November 2021. A month later, the 2021 Sukuk prospectus allocated another ₦1.5 billion to Section I of the same road. The prospectus does not say whether that money was meant to settle payments already due on the finished work, and we found no later official record that explains this.

The Loko-Oweto Bridge between Nasarawa and Benue states was dedicated for public use at a virtual commissioning on 23 May 2023. A year later, the Federal Ministry of Works’ scorecard of ongoing projects, dated 27 May 2024, still put the bridge and its approach roads at 95.19 per cent completion. Both records come from government. They cannot both be the full story.

Some debts cannot be traced to loans at all. The DMO’s external debt report of 30 June 2026 lists $912.5 million on four lines that could not be traced, in whole or in large part, to any published loan agreement, purpose or terms. The biggest is the $835.78 million owed to the African Export-Import Bank (Afreximbank), up from $637.82 million three months earlier. Afreximbank had no line of its own in the debt stock at the end of 2025.

Then there is money raised without a list of projects. ₦550 billion of the Federal Government Sukuk, made up of the Works’ share of the 2023 issue and the whole of the 2025 issue, has no published list of the roads it is paying for. Investors who buy a Sukuk are told what assets stand behind it. The citizens who will repay it should be told at least as much.

…the National Assembly and the state houses of assembly should ask to see what earlier loans achieved before they approve new ones. The Fiscal Responsibility Act already requires a stated purpose; lawmakers can reasonably ask whether the last one was met… Nigeria will keep borrowing, as every country does. Borrowing in the name of the public comes with a duty to account to the public, and that duty does not end when the loan agreement is signed.

The Center for Fiscal Transparency and Public Integrity (CeFTPI) wrote twice to the DMO, setting out some of these red flags and asking for clarification. The DMO acknowledged receipt of the correspondence but has not answered the questions asked till now. We are not assuming the worst, and some of these lines may well have ordinary explanations. But the DMO is the office that should be able to tell Nigerians who the country owes, for what, and on what terms.

A few changes would go a long way. The DMO should publish the external debt stock, loan by loan, with the lender, date, terms and purpose of each facility, and publish the states and amounts involved whenever it restructures the debts of states. Every loan and bond should close with a public completion record that is independent of the agency that spent the money. Bond issuers, the Federal Government included, should publish the projects each issue will fund and report on them until the bond matures, and should not allocate money to works that official records already describe as finished.

Finally, the National Assembly and the state houses of assembly should ask to see what earlier loans achieved before they approve new ones. The Fiscal Responsibility Act already requires a stated purpose; lawmakers can reasonably ask whether the last one was met.

Nigeria will keep borrowing, as every country does. Borrowing in the name of the public comes with a duty to account to the public, and that duty does not end when the loan agreement is signed.

Michael Toyo is a policy analyst with the Center for Fiscal Transparency and Public Integrity.