₦airaland Forum

The Lagos Chamber of Commerce and Industry (LCCI) has expressed a concern over Nigeria’s rising public debt profile, warning that the current pace of borrowing is capable of undermining fiscal stability.

In an address on the state of the economy delivered yesterday, LCCI President, Mr. Gabriel Idahosa expressed mixed feelings over Nigeria’s economic outlook.

He stated that while there are signs of progress in macroeconomic stability and inflation moderation, the debt sustainability remains a concern.

Idahosa’s address, titled “State of the Economy: Q4 2025,” reflected the Chamber’s deep analysis of global and domestic economic trends, and its recommendations to the Federal Government on sustaining recovery and fostering a more resilient private sector.

The LCCI president disclosed that Nigeria’s total public debt stood at N152.4 trillion as of June 2025, representing a year-on-year increase of N18.1 trillion or 13.5 percent from N134.3 trillion recorded in the same period of 2024.

The debt stock also rose by N3.01 trillion, or 2 percent, between March and June 2025.

According to Idahosa, this continuous upward trajectory reflects both fresh borrowings and the impact of a depreciating exchange rate on external obligations.

External debt rose to N71.85 trillion ($46.98 billion), while domestic debt reached N80.55 trillion ($52.67 billion), each increasing by over 13 percent compared to the previous year.

“Despite notable improvements in revenue performance, driven by stronger non-oil receipts, higher oil output, and relative exchange rate stability, both the federal and subnational governments have continued to pursue external loans aggressively,” he said.

The Chamber warned that debt servicing costs continue to consume a large portion of government revenue, crowding out critical investment in health, education, and infrastructure. On the domestic front, the Federal Government remains the largest borrower, accounting for N76.59 trillion, while subnational governments and the FCT collectively hold N3.96 trillion.

Idahosa explained that while domestic borrowing reduces exchange rate exposure, the high interest rates on government securities make private borrowing more expensive and limit access to affordable credit for businesses.

“Although Nigeria’s public debt remains within the sustainable threshold, sustainability is highly sensitive to fiscal vulnerabilities. Without disciplined, growth-oriented debt management, the current pace of borrowing could erode investor confidence and compromise the country’s future fiscal space,” he cautioned.

Speaking on the broader macroeconomic performance, Idahosa noted that Nigeria’s economy has shown resilience despite global and domestic headwinds.

Following the GDP rebasing in 2024, the nation’s nominal output stood at N372.8 trillion, up 41.7 per cent from N314 trillion in 2023, making Nigeria the fourth-largest economy in Africa.

Real GDP growth accelerated to 4.23 percent in the second quarter of 2025—the highest since Q2 2021—driven by a 20.46 percent rebound in the oil sector and steady expansion in non-oil activities.

“The sustained disinflation trend is commendable and reflects improved policy coordination. Lower inflation should translate into reduced business costs and ease cost-of-living pressures on households.”

The Chamber urged the Central Bank of Nigeria (CBN) to maintain clear and predictable policy communication to anchor expectations and prevent speculation in foreign exchange and money markets.

He noted that the IMF’s latest review projects Sub-Saharan Africa to grow by 4.1 percent in 2025, with Nigeria among key contributors. However, the report, he noted, highlights elevated debt servicing costs, weak revenue mobilization, and macroeconomic fragilities as persistent threats.

“The IMF’s warning is timely. Nigeria’s reliance on domestic borrowing is pushing up the cost of capital and crowding out private investment. We must improve debt management and adopt a balanced fiscal approach that supports enterprise growth,” Idahosa said.

AntiChristian:
Even the almighty USA get debt! Abeg leave Nigeria alone!

We don see LCCI.

Kreesxxx:
The presidency is making sure that their life in affluence is sustained while subjecting the masses in abject poverty.

anonimi:
The eyesore on Bourdillon Road
2nd January 2025

Beyond his neighbours, there is something about the sight of people hanging around a president’s residence that does not speak well of his leadership capabilities. Maybe no one has nudged him to see it, but the impression that spectacle on Bourdillon Road generates is that Tinubu enjoys the sight of suffering humans and thrives in—and through— their poverty.

If all these years, impoverished people hang around you and you remain comfortable enough to keep them just so they can be handed tokens of your large heart, then it means you have a pro-poverty mindset. Such a frame of mind is oriented toward cultivating poverty rather than stimulating abundance.

That is why he could unproblematically relate the story of his “friend” who went from using five Rolls Royce to a far-less valued car and not consider the import of the nonsense he was saying. That spurious account was an indication that this is a man for whom poverty—of others, not himself—is an ideal.

https://punchng.com/the-eyesore-on-bourdillon-road/

NOETHNICITY:
But if Subsidy removal helped us why is Tinubu still borrowing at such alarming rate?
Nigerians would have felt a lot relieved to hear that we no longer need to borrow to finance our budget

princeade86:
My question is, what are they using subsidy money for? What of money customs and other agencies generating?

TimeManager:
The Federal Government has revealed that the elimination of the petrol subsidy under President Bola Tinubu has resulted in savings of over $84 billion, which are now being channelled into the construction and rehabilitation of 40 key road projects across the country over the past two years.

This was disclosed in a policy brief released by the National Orientation Agency (NOA), titled “Two Years Later: Key Benefits of Subsidy Removal,” and made available to journalists over the weekend in Abuja.

The report, which reviewed the outcomes of the subsidy removal since May 29, 2023, noted that the policy averted a looming economic crisis.

It also enabled the Tinubu administration to clear long-standing financial liabilities, increase capital investments, and support the financial stability of state governments.

https://businessday.ng/news/article/84bn-saved-from-petrol-subsidy-now-financing-40-key-roads-report/?amp

ManirBK:
Aug 28, 2023

The Federal Government says it has no intention to borrow from any local or foreign organisation with its removal of subsidy on petrol and exchange rate harmonisation.

The Minister of Finance and Coordinating Minister for the Economy, Chief Wale Edun, revealed this at the end of the inaugural Federal Executive Council meeting on Monday in Abuja.

He said that the benefit of the subsidy removal would be ploughed back into various sectors aimed at boosting government revenue and improving the business environment for local and foreign investment.

Edun said that with the increased revenue from subsidy removal, various palliatives have been made available to cushion its effect on a short, medium and long-term basis.

He reiterated the President Bola Tinubu-led administration’s desire to bring back the economy from the wood it has found itself over time.

https://www.vanguardngr.com/2023/08/fg-ends-borrowing-finance-minister/amp/

ogododo:
https://dailytrust.com/nigerias-borrowing-pace-can-undermine-fiscal-stability-lcci/?noamp=available

nairalanda1:
The alternative is taxing everyone who isnt paying tax to the government..ie the federal and state governments, which amounts to 70% of the population. It will reduce borrowing, not eliminate it. For that we have to diversify the economy, which apc hasn't been good at.

But since suggesting that means you an 'agbero', and you are 'not interested in fighting corruption ' , the government will still take more loans.

We can't tax to prosperity , but we can reduce our loan dependency via tax

Remember that our budget this year is 30 tr naira. Not enough for 230 million people. Remember also that the budget was set based on the idea that oil would be at 75 dollars per barrel or more. It has been on average 68 dollars per month. That means more loans or for now tax more...and cut government spending a d cut the size of the civil service and remove any subsidies

Long term, manufactured goods and services

P.s ; The above does not mean we should ignore corruption, or that tinubu is good.

wyt:
Yea but the problem of borrowing by Nigerian Govt is what it is used for? The level borrowed to date should have have feasible impact to the economy. Consider the white elephant projects they are borrowing to finance, where there is no real value to us at least for now at astronomical cost.
As you said, they borrow to enrich the politicians who are in sync with their govt.
I feel for the country. What will happen when the north take back the power as we know there performance will likely be worse than what we are seeing today

ogododo:
https://dailytrust.com/nigerias-borrowing-pace-can-undermine-fiscal-stability-lcci/?noamp=available