Despite Nigeria’s landmark removal of petrol subsidies and foreign exchange market liberalization, the country’s debt profile continues its alarming upward trajectory.
Murtala Sagagi, a Central Bank of Nigeria (CBN) Monetary Policy Committee member, revealed this concerning trend in the latest MPC communique released Monday.
Public Debt Surges N4.72 Trillion in Three Months
Nigeria’s total public debt witnessed a dramatic increase from N144.67 trillion in December 2024 to N149.39 trillion by March 2025.
This N4.72 trillion surge in just three months underscores the government’s persistent borrowing appetite despite implementing significant structural reforms.
Sagagi emphasized that “even with the removal of fuel subsidy and liberalization of the exchange rates, the appetite for unfettered spending by the government has grown even stronger.”
The debt service burden continues shrinking Nigeria’s fiscal space, limiting the government’s capacity for productive investments.
Economic Diversification Remains Elusive Amid Structural Challenges
Limited economic diversification and overreliance on government debt have intensified Nigeria’s vulnerability to global commodity price shocks.
Since mid-2023, unlocking economic diversification opportunities has remained the primary objective of current structural reforms, yet progress remains insufficient.
The MPC member highlighted how the country’s deteriorating debt profile constrains fiscal maneuvering room due to enormous debt service costs.
These challenges persist despite ongoing efforts to modernize Nigeria’s economic framework through subsidy removal and foreign exchange unification.
Growth Projections and Policy Recommendations for 2025
Nigeria’s economic growth is projected to reach 3.2 percent in 2025, positioning it among the region’s highest performers.
However, Sagagi stressed that sustaining this momentum requires immediate policy interventions to restore fiscal discipline and stimulate domestic productivity.
“To fast-track inclusive growth, a policy shift is required to restore fiscal space, exercise more discipline, promote domestic oil refining, and stimulate non-oil production and exports,” Sagagi stated.
He emphasized leveraging inflation moderation gains and foreign exchange unification achievements to accelerate growth while improving citizen welfare.
The CBN official called for growth-enhancing adjustments using fiscal-monetary tools to boost local productivity, reduce debt levels, and prevent crowding out private sector investment opportunities.