Despite stronger revenues and assurances that “Nigeria is not broke,” analysts warn that surging debt service, weak tax intake, and opaque liabilities threaten the country’s fiscal sustainability.
Nigeria’s external reserves have reached multi-year highs, but economists caution that this buffer cannot mask deep fiscal vulnerabilities. In a detailed analysis, The Guardian reports that debt service consumed N11.59 trillion in 2024—about 60 percent of federal revenue—while capital spending lagged far behind recurrent costs. Total public debt climbed to N150 trillion, or 40.3 percent of GDP, but experts stress that Nigeria’s meagre 10 percent tax-to-GDP ratio undermines comparisons with advanced economies.
Former Monetary Policy Committee member Prof. Adeola Adenikinju said, “Nigeria is not broke,” citing a 40 percent rise in half-year revenue. Economist Dr. Chiwuike Uba added that “overall, Nigeria is not broke” but warned of “severe fiscal constraints.” Non-oil revenues between January and August 2025 rose to N20.59 trillion, up 40.5 percent from a year earlier.
Analysts, however, highlight off-balance-sheet liabilities such as electricity subsidies and unpaid obligations to public workers, alongside questions about the true cost of Central Bank overdrafts restructured under the previous administration. With a shrinking fiscal margin, heavy domestic borrowing crowds out private credit, while the sinking fund and Excess Crude Account remain unfunded.
Economists warn that a fall in oil prices, a sudden stop in portfolio inflows, or a spike in global rates could expose Nigeria’s “weak financial underbelly” within weeks, turning today’s slow fiscal erosion into a rapid crisis.