Onome Amuge
Economists have warned that the nation’s rising debt burden is being shaped more by fiscal and structural constraints than by the high volume of borrowing, a concern that dominated discussions at the Capital Market Academics of Nigeria (CMAN) Q4 2025 symposium held recently.
While public discussions on debt sustainability often centre on the size of the national debt, which is estimated to exceed N121 trillion after the latest exchange-rate adjustments, the CMAN panel sought to redirect attention to deeper structural issues. According to the speakers, the truly concerning signals lie in declining fiscal capacity, an increasingly fragile macroeconomic framework and reform cycles that repeatedly stall. Collectively, they warned, these factors pose a greater threat to the Medium-Term Debt Strategy and the overall trustworthiness of the country’s fiscal and investment outlook.
The symposium, themed “Nigeria’s Rising Debt Profile and Sustainability Imperatives,” brought together economists and debt-market specialists including Tope Fasua, Ibrahim Natagwandu, Bright Eregha,Musa Baba and Bongo Adi. The forum was chaired by Wilfred Iyiegbunwe, moderated by broadcaster Nancy Nnaji, and hosted by Uche Uwaleke, the CMAN president.
Iyiegbunwe set the tone in his opening remarks by drawing parallels with Nigeria’s early-2000s debt crisis, which culminated in the Paris Club buy-back negotiated under the Obasanjo administration. According to him, the warning signs today look eerily familiar, considering the overstretched fiscal base, growing reliance on borrowing for recurrent obligations, and unresolved structural bottlenecks.
“During the Obasanjo years, the debt overhang was suffocating public investment. What saved the country then was a combination of political will, global goodwill and technocratic competence. We may be heading back to that fork in the road, except the room for manoeuvre is now narrower,” he said.
The difference today, he argued, is that external conditions are less favourable, oil is no longer the reliable buffer it once was, and exchange-rate depreciation has magnified Nigeria’s external obligations far beyond earlier debt cycles.
His key point was directed squarely at the policy establishment. He maintained that CMAN is not simply an academic network but one of the few independent intellectual institutions capable of delivering the locally grounded policy assessments Nigeria urgently needs. According to him, the country can no longer rely on imported policy frameworks.
A major point of consensus at the symposium was that Nigeria’s Medium-Term Debt Strategy (MTDS); which aims to lengthen maturities, rebalance the domestic-external debt mix, reduce refinancing risks and strengthen investor confidence, remains sound on paper. The problem, speakers argued, is that the MTDS is running ahead of the broader economic context required to support it.
According to the speakers, Nigeria is attempting to stretch debt maturities while relying heavily on short-term borrowing instruments. It is attempting to reduce its reliance on Ways and Means financing while rolling over outstanding liabilities that remain poorly disclosed. It is attempting to rebalance its domestic–external mix without a stable FX framework. It is attempting to build investor confidence at a time when revenue performance is declining in real terms despite higher nominal collections.
“We cannot talk about sustainability without talking about the underlying productivity of public spendingIf debt does not translate into real economic output, the entire logic of borrowing collapses,” said Bright Eregha. “
Speakers emphasised that the most critical weakness in Nigeria’s debt architecture is revenue fragility, not merely the size of borrowing. With tax revenue at 10 per cent of GDP (one of Africa’s lowest), even moderate debt levels become difficult to service.
Another key concern raised during the discussions was Nigeria’s incomplete debt visibility, with speakers noting that widely cited public debt figures exclude private-sector external borrowing, state-level contingent liabilities, extra-budgetary obligations, central bank exposures beyond Ways and Means, and several unrecorded foreign-exchange obligations.
This incomplete picture, they argued, weakens debt sustainability analysis and creates the risk of sudden shocks, particularly in the FX market.
“You cannot manage what you do not measure comprehensively. A number of countries with lower debt levels have faced crises simply because their contingent liabilities were underestimated. Nigeria must not fall into that trap,” said Bongo Adi. “
One proposed solution was the creation of a Unified National Debt Database, which would integrate reporting across federal, state and local governments. Similar systems exist in emerging markets such as Indonesia and Brazil.
Beyond technical concerns, several panelists explored the political-economy dynamics that continually slow or dilute Nigeria’s fiscal reforms. The removal of fuel subsidies, adjustment of electricity tariffs, unification of the exchange rate and the elimination of Ways and Means financing are widely regarded as necessary steps. Yet they have been implemented in environments where public confidence is low, institutional delivery is uneven, and governance transparency remains inconsistent.
“When the public does not trust that savings will be used productively, resistance to reform becomes stronger,” said Musa Baba.
This tension, he argued, has constrained the full implementation of fiscal adjustment measures. Nigeria risks a situation where it undertakes the pain of reforms without capturing the full benefits.
An area where the panelists pushed a different narrative was the role of Public–Private Partnerships (PPPs). While Nigeria has repeatedly promoted PPPs as alternatives to borrowing, the symposium argued that PPPs cannot be substitutes for rigorous fiscal reform. Instead, they should be treated as complementary tools, particularly in sectors with strong cash-flow potential such as toll roads, logistics corridors, industrial processing zones and digital infrastructure.
Speakers also noted the growing global use of non-traditional financing instruments and observed that Nigeria has barely begun to leverage options such as sovereign infrastructure Sukuk, green bonds, blended-finance tools, credit-guarantee schemes, and diaspora bonds.
They argued that these instruments, if scaled, could reduce reliance on expensive conventional borrowing, deepen capital-market participation and align financing with long-term investment needs.
One of the more striking conclusions of the symposium was that Nigeria’s debt challenge is ultimately a growth problem. Without higher productivity, improved export performance and stronger industrial output, fiscal adjustments can only do so much.
Nigeria’s economy must grow at double-digit rates, panelists said, to escape the low-revenue, high-debt, low-investment loop that has slowed progress for more than a decade.
Export diversification, especially in agro-processing, minerals, digital services and manufacturing, was also identified as a long-term stabiliser capable of strengthening FX earnings and reducing reliance on oil.
