The Nigerian economic landscape is currently facing significant scrutiny as the nation’s public debt continues a steep upward trajectory. This fiscal expansion comes amid major policy shifts, including the removal of subsidies on PMS (petrol) and electricity, raising questions regarding the impact of these measures on national development. 

The Evolution of Public Debt

The transition in Nigeria’s debt stock over the last decade reflects a period of aggressive borrowing.

• 2015 – 2023: At the beginning of the Buhari administration in 2015, Nigeria’s total public debt stood at approximately ₦12.12 trillion. By the end of his tenure in May 2023, the figure had escalated to over ₦87 trillion, driven largely by budget deficits and the securitization of "Ways and Means" advances from the Central Bank.

• Current Standing: Recent data indicates that the debt stock has continued to climb, with projections and current liabilities approaching the ₦100 trillion to ₦120 trillion mark, following the unification of the exchange rate and continued borrowing to meet fiscal gaps.

Subsidy Removal and Fiscal Policy

Despite the removal of long-standing subsidies—intended to free up trillions of Naira for infrastructure and social welfare—the expected relief on the national balance sheet has been tempered by several factors:

• Debt Servicing: A substantial portion of federally collected revenue is currently directed toward servicing existing debts, limiting the "fiscal space" created by subsidy removal.

• Currency Devaluation: The depreciation of the Naira has significantly increased the valuation of foreign-denominated debt when measured in local currency.

• Budgetary Constraints: While the 2025 Budget outlines ambitious targets, concerns persist regarding the financing of capital projects. Reports suggest that many contractors remain unpaid, leading to a stagnation in critical infrastructure development across the country.

Perspectives on Reform

Prominent political figures, including former presidential candidate Peter Obi, have frequently voiced concerns regarding the transparency and productivity of these borrowings. The central critique suggests that the increase in debt has not translated into proportional growth in the productive sectors of the economy.

"The concern is not just the volume of the debt, but the 'debt-to-revenue' ratio and the lack of visible, high-impact capital projects funded by these loans."

Outlook for 2025

As the government navigates the current fiscal year, the focus remains on whether the administration can successfully bridge the gap between revenue generation and expenditure without further exacerbating the debt burden. Observers emphasize the need for:

1. Stricter Fiscal Discipline: Aligning expenditure with actual revenue performance.

2. Infrastructure Transparency: Ensuring that capital releases are prioritized for contractors to stimulate economic activity.

3. Revenue Diversification: Moving beyond oil-dependent income to stabilize the economy against global price shocks.