Nigeria’s ₦166.79tn Debt: What Debt Service and Lower Rates Mean for Credit

Nigeria’s public debt reached ₦166.79 trillion as of June 30, 2026, according to the Debt Management Office. Domestic debt accounted for ₦91.59 trillion, while external debt stood at ₦75.20 trillion. The 2026 budget also sets aside ₦15.8 trillion for debt service, showing the growing pressure of existing obligations on public finances. The key concern is not only the size of the debt but its affordability. Government revenue, refinancing costs, exchange-rate movements and the ability to roll over maturing obligations will determine whether debt service remains manageable. The ₦22.11 trillion securitised Ways and Means balance is now part of federal domestic debt and should not be confused with a direct withdrawal of liquidity from banks. The Central Bank’s reduction of the Monetary Policy Rate to 23% may gradually ease borrowing costs. However, banks will still price loans based on risk, collateral, funding costs and a borrower’s financial strength. Businesses and investors should watch government-security yields, bank credit growth, public revenue and whether lower policy rates translate into cheaper commercial loans.

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