Nigeria Sovereign Debt Market: Overview, 2025 Edition
By Impala Market Team
Executive Snapshot
Total Public Debt: ₦97.3 trillion (~USD 108 billion)
Debt-to-GDP Ratio: ~47.6%
Debt Composition: ~61% domestic, ~39% external
Outlook: High interest rates and inflation are shaping borrowing dynamics. Nigeria is relying more on domestic debt while balancing fiscal consolidation with infrastructure financing needs.
1. Debt Market Structure
1.1 Total Public Debt Profile
Domestic Debt: ₦59.1 trillion
External Debt: ₦38.2 trillion
Debt Service-to-Revenue Ratio: Over 90% in recent years
Source: DMO Nigeria Debt Report 2024
1.2 Legal & Institutional Framework
Debt managed by the Debt Management Office (DMO)
Fiscal rules guided by the Fiscal Responsibility Act (2007)
Central Bank of Nigeria (CBN) manages Treasury Bill auctions
National Assembly approval required for new external borrowing
2. Domestic Debt Instruments
Instrument Currency Maturity Frequency Notes FGN Bonds NGN 2–30 years Monthly Fixed coupons, listed on FMDQ/NGX Treasury Bills NGN 91–364 days Biweekly Issued at discount Savings Bonds NGN 2–3 years Monthly Targeted at retail investors Sukuk Bonds NGN ~7 years Periodic Non-interest Islamic finance bonds
Retail Access: FGN Savings Bonds issued via stockbrokers
Sukuk increasingly used for infrastructure projects
3. External Sovereign Debt
Eurobonds: Issued in USD, traded on international markets
Multilateral: World Bank, IMF, AfDB
Bilateral: China, France, India
Nigeria is cautious about new Eurobond issuance due to high global rates
4. Investor Base
Domestic: Pension Funds (largest), Banks, Insurance, PFAs
Foreign: Active in Eurobonds, less so in local currency bonds due to FX risk and repatriation constraints
5. Secondary and OTC Market
Trading Venues: FMDQ Securities Exchange and NGX for listed debt
OTC Market: Highly active, especially among PDMMs and banks
Clearing: Central Securities Clearing System (CSCS)
Yields & Quotes: Daily on FMDQ website – fmdqgroup.com
6. Recent Trends
364-day T-Bill yields above 19% as of Q1 2025
FGN Bonds: 10-yr benchmark yield around 21.3%
CBN MPR at 24.75%, keeping yields elevated
DMO leaning into longer-dated instruments to ease refinancing pressure
7. Risk Assessment
Sustainability: Elevated, driven by interest cost burden
Currency Risk: High due to FX volatility and large Eurobond exposure
Market Risk: Domestic crowding-out and yield pressure
8. Opportunities & Reforms
Expand Sukuk and green bond programs
Introduce retail-accessible Eurobond instruments
Boost transparency in OTC pricing
Leverage pension assets for infrastructure finance
Enhance digital trading access through FMDQ and NGX platforms
9. Annexes
Credit Ratings:
Moody’s: Caa1
S&P: B-
Fitch: B-
For Investors & Researchers
Nigeria remains Africa’s largest local currency debt market, offering deep liquidity and high returns for naira-denominated portfolios. However, macro risks and debt service pressures call for selective positioning.
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