In recent weeks, headlines have celebrated Nigeria’s removal from the International Monetary Fund’s (IMF) debtor list, with many attributing this milestone to President Bola Ahmed Tinubu’s administration. While this is a significant achievement, the full picture of Nigeria’s debt profile—past and present—requires a closer look to help everyday Nigerians understand what it means for the country’s economic future. Let’s break it down simply, comparing the debt landscape before Tinubu’s presidency with today, examining state-level debt trends, and clarifying the current status with the IMF—all while acknowledging progress and the work still ahead.
Nigeria’s Debt Before Tinubu: A Heavy Load
When President Tinubu took office on May 29, 2023, Nigeria was grappling with a substantial debt burden inherited from previous administrations. According to the Debt Management Office (DMO), Nigeria’s total public debt stock in the second quarter of 2023 stood at N87.38 trillion (about $113.42 billion). This included N33.25 trillion ($43.16 billion) in external debt—money owed to foreign creditors like the IMF, World Bank, and China—and N54.13 trillion ($70.26 billion) in domestic debt, owed to local lenders like banks and bondholders. The debt-to-GDP ratio, a measure of how much debt a country has compared to its economic output, was 38%, considered sustainable but worrisome as it had risen from 9.3% in 2010.
This debt pile-up was driven by years of borrowing to cover budget deficits, fund infrastructure, and cushion economic shocks like the 2020 COVID-19 pandemic. External debts were particularly tricky because they were paid in foreign currencies, and the naira’s depreciation made repayments costlier. For example, a $1 billion loan became more expensive in naira terms as the currency weakened. By 2022, Nigeria’s external debt was $41.69 billion, with nearly half owed to multilateral lenders like the IMF and World Bank. The country was spending a huge chunk of its revenue—73.5% in 2023—on debt servicing, leaving little for schools, hospitals, or roads.
The Tinubu Era: Progress Amid Rising Debt
Fast forward to December 2024, and Nigeria’s total public debt has climbed to N144.67 trillion (roughly $100 billion), a 65.5% increase from June 2023. At first glance, this might sound alarming, but the story is more complex. In dollar terms, the debt actually decreased slightly from $108.23 billion in Q4 2023 to $91.46 billion in Q1 2024, largely due to naira devaluation, which inflated the naira value of external debts. The Tinubu administration borrowed N6.53 trillion between December 2023 and March 2024, including funds to finance the 2024 budget deficit and securitize “Ways and Means” advances (short-term loans from the Central Bank of Nigeria).
Despite the rising debt, Tinubu’s government has made strides in managing it. The debt-to-GDP ratio, now at 51.29% as of September 2024, remains below the 70% threshold for market-access countries, indicating Nigeria can still handle its debt without tipping into crisis. More impressively, debt servicing as a share of government revenue dropped from 97% to 65% in 2024, freeing up more funds for other priorities. The administration’s reforms, like removing fuel subsidies and floating the naira, have boosted revenues, though they’ve also raised living costs for many Nigerians.
State Debt Profiles: Mixed Progress
Nigeria’s debt isn’t just a federal issue—states and the Federal Capital Territory (FCT) also borrow, and their debt trends tell a varied story. In Q2 2023, Lagos State led with N996.44 billion in domestic debt, followed by Delta State at N465.40 billion. Jigawa had the least at N43.13 billion. By Q1 2024, Lagos’s domestic debt slightly decreased to N929.41 billion, while Delta’s dropped to N334.90 billion. Jigawa’s debt plummeted to N2.07 billion, showing significant repayment efforts. However, states like Kaduna, with $569.38 million in external debt in Q2 2023, continued to carry heavy foreign debt burdens.
Some states have made progress in reducing debt, likely due to increased federal allocations and stricter borrowing oversight. For instance, posts on X suggest states may have slowed borrowing in 2024, possibly due to federal reforms. Yet, others continue to rely on loans to fund projects, raising concerns about sustainability, especially in states with low internally generated revenue. The Tinubu administration’s push for fiscal discipline could help states manage debt better, but more work is needed to ensure borrowed funds are used productively.
The IMF Debt Milestone: Kudos, But Not the Full Story
The headline-grabbing news is Nigeria’s repayment of the $3.4 billion IMF Rapid Financing Instrument (RFI) loan, taken in April 2020 to combat COVID-19’s economic fallout. According to the IMF’s website (as of May 7, 2025), Nigeria no longer appears among the 91 countries with active loan commitments, confirming the principal was fully repaid by April 30, 2025. IMF data shows Nigeria’s debt to the Fund dropped from $2.47 billion in 2023 to $800.23 million in 2024, and finally to zero in 2025. This is a major win, and President Tinubu deserves kudos for overseeing this repayment, which signals fiscal responsibility and boosts Nigeria’s global credit standing.
However, the narrative needs shaping to avoid misleading Nigerians. While the principal is cleared, Nigeria still owes about SDR 125.99 million (roughly $30.24 million or N274.66 billion at N2,180 per SDR) in interest and administrative charges, with payments scheduled through 2029. These are not new loans but costs tied to the RFI loan. Claims that Nigeria is “debt-free” with the IMF are overstated, as these charges remain. Still, clearing the principal is a bold step, and it’s fair to applaud Tinubu’s administration for prioritizing this repayment amid other economic pressures.
Looking Ahead: A Path to Financial Strength
Nigeria’s debt journey under Tinubu shows both progress and challenges. The administration has reduced the IMF debt burden, lowered debt servicing costs relative to revenue, and encouraged some states to manage debt better. Yet, the rising total debt stock and naira devaluation highlight the need for caution. Borrowing isn’t inherently bad—it can fund roads, schools, or power plants—but it must be prudent and tied to projects that grow the economy.
To become a formidable economic force in Africa, Nigeria must build on Tinubu’s efforts. This means diversifying revenue beyond oil, supporting businesses to create jobs, and investing in infrastructure like electricity and roads. States should follow Jigawa’s example, reducing debt where possible, while the federal government ensures loans are transparent and productive. Nigerians deserve an economy where debt doesn’t eat up resources needed for health, education, or security.
President Tinubu has laid a foundation with the IMF repayment, but the road to financial buoyancy is long. By sustaining reforms, curbing wasteful spending, and boosting non-oil revenue, his administration can steer Nigeria toward a future where debt is manageable, and prosperity is within reach. For now, let’s celebrate the IMF milestone while keeping our eyes on the bigger goal: a Nigeria that stands tall among its African peers.
Ayo Abiona (Malam Audu) writes from the temple of International Institute of Journalism, Osogbo study center Temple.
Sources: Debt Management Office Nigeria, National Bureau of Statistics, IMF Website (May 7, 2025), Central Bank of Nigeria, Legit.ng, Sahara Reporters, Naija News, Daily Trust.
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