The Nigerian federal government is defending the increase in public debt, now estimated at around 152 trillion naira, emphasizing that this rise is primarily due to greater transparency and exchange rate adjustments, not reckless borrowing.
Presenting the Nigerian Economic Summit Group’s (NESG) 2026 Macroeconomic Outlook in Lagos, Coordinating Minister for Economic and Financial Affairs Wale Edun stated that the Tinubu government has prioritized transparency and fiscal discipline in the accounting of government liabilities.
According to Edun, Nigeria’s total debt amounts to just over US$100 billion. A significant portion of this increase is attributable to the official recording of 30 trillion naira in previously unrecorded cash advances. He added that the revaluation of the foreign currency debt’s exchange rate accounts for the majority of the remaining increase.
He acknowledged that debt servicing remained a challenge, but emphasized that the transparency of public finances had improved significantly. He stated that despite the financial pressures, the government had continued to meet its legal obligations, including paying salaries and pensions and servicing the debt.
Regarding the implementation of the 2025 budget, Mr. Edun noted that Nigeria’s fiscal position had proven robust in the face of global and national economic challenges. He stated that the budget deficit stood at 3.4 percent of GDP, slightly above the threshold set by the Fiscal Responsibility Act, reflecting ongoing adjustment efforts.
He explained that revenues continued to be impacted by lower oil and gas income, although non-oil revenues showed signs of improvement. According to Mr. Edun, fiscal federalism reforms had strengthened the financial position of many states, some of which were now running budget surpluses, allowing for increased spending on health, education, and public services.
Mr. Edun stated that while his government’s economic reforms had been politically challenging, they had led to macroeconomic stabilization and prepared the country for consolidation. He argued that distortions such as fuel subsidies, preferential access to foreign exchange, and profit maximization opportunities had been eliminated, creating a fairer economic environment focused on productivity and innovation.
Regarding investor confidence, the minister stated that Nigeria’s reforms were sending positive signals globally. He pointed to increased engagement in multilateral institutions, the country’s removal from international high-risk and watch lists, and positive reactions from rating agencies.
He added that economic activity was diversifying, with several sectors experiencing growth exceeding 3 percent despite ongoing challenges in manufacturing and agriculture. While inflation remained a concern, it reflected the ongoing efforts of monetary authorities to stabilize prices.
Mr. Edun also highlighted improvements in Nigeria’s capital market, citing positive developments in the trade balance, foreign exchange reserves, and market capitalization, which he said had achieved a high level of international credibility.
Looking ahead, he stated that the government anticipates economic growth of approximately 4.7 percent in 2026, average inflation of 16.5 percent, and a reference exchange rate of 1,400 naira per US dollar. He added that the 2026 budget, themed “Budget of Consolidation, Strengthening Resilience, and Shared Prosperity,” aims to translate macroeconomic progress into tangible benefits such as access to food, electricity, housing, and employment.
Analysts reacted differently to the government’s statements. Some welcomed the benefits of increased transparency and the recording of previously unrecorded liabilities, but also emphasized that a high level of debt coupled with weak revenue growth could exacerbate risks to fiscal sustainability. Others pointed out that even with seemingly manageable debt ratios, the increasing debt service relative to revenues necessitates caution and greater revenue mobilization.
They agree that transparency allows for a better understanding of the true state of public finances, but stress that long-term sustainability will depend on rigorous fiscal management.
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