Nigeria continues to face serious debt challenges despite improvements in some key economic indicators, according to a new report released by the Nigerian Economic Summit Group (NESG), which warned that underlying fiscal pressures still pose risks to the country’s economic stability.
In its May 2026 Debt Burden Monitor, the NESG revealed that Nigeria’s Debt Burden Index (DBI) dropped from a record 83.6 points in 2023 to 70.9 points in 2024, a trend that may initially appear to signal easing debt stress.
However, the group explained that the decline was mainly the result of temporary relief in debt-servicing costs rather than a genuine improvement in the country’s financial position.
The report cautioned that commonly used debt indicators, especially debt-to-GDP ratios, could be concealing deeper fiscal weaknesses within the economy.
“Headline indicators suggest a degree of stabilisation, yet underlying fiscal pressures remain elevated when assessed through a more comprehensive lens,” the NESG stated.
According to the findings, Nigeria’s public debt-to-GDP ratio climbed significantly to 40.6% in 2024 as the government continued relying heavily on borrowing to fund budget shortfalls amid weak revenue generation.
Although the ratio is expected to decline to 37.7% by the fourth quarter of 2025, the NESG stressed that the projected improvement is largely tied to valuation effects rather than stronger economic fundamentals.
Quarterly projections in the report show debt pressures remaining elevated throughout 2025. The DBI is forecast to rise to 78.4 points in the first quarter, peak at 79.6 points in the second quarter, ease slightly to 76.2 points in the third quarter, and close the year at 79.2 points.
“This pattern indicates that debt pressure has not structurally eased but instead fluctuates within a high-stress band,” the NESG noted.
Economic analysts say the trend raises concerns about the government’s capacity to adequately finance essential sectors including healthcare, education, infrastructure and security while continuing to service debt obligations.
The report comes as Nigeria pushes ahead with fiscal reforms aimed at strengthening investor confidence, stabilising public finances and attracting foreign investment. Despite these efforts, the NESG argued that the country has not yet achieved meaningful progress toward long-term debt sustainability.
“Overall, the 2024–2025 transition does not yet reflect a decisive shift toward debt sustainability,” the report stated, adding that apparent gains in major indicators still conceal “persistent structural imbalances.”
The group maintained that its Debt Burden Index presents a more accurate assessment of Nigeria’s fiscal health than traditional debt measures, warning that the country remains within a “high-risk fiscal environment” despite signs of stability in conventional indicators.