PUBLIC DEBT, DEBT SERVICING, AND ECONOMIC GROWTH IN NIGERIA

Abstract

Nigeria’s rising public debt profile has become a central issue in economic policy debates, particularly as debt servicing consumes an increasing share of government revenue. This paper investigates the relationship between public debt, debt servicing, and economic growth in Nigeria from 2014 to 2024. Relying on secondary data from the Central Bank of Nigeria (CBN), National Bureau of Statistics (NBS), World Bank, and International Monetary Fund (IMF), the study employs descriptive statistics and trend analysis to examine the evolution of debt dynamics and their implications for macroeconomic performance. The findings reveal that Nigeria’s total public debt increased from ?12.1 trillion in 2014 to over ?97 trillion in 2024, while debt servicing rose disproportionately, often exceeding 90% of government revenue in some fiscal years. Although external borrowing initially supported infrastructure investment, rising servicing costs have constrained fiscal space, reduced capital expenditure, and slowed inclusive growth. The evidence suggests a debt overhang effect, where excessive servicing obligations crowd out productive investment and weaken growth prospects. The paper concludes that while moderate borrowing can stimulate growth, Nigeria’s current trajectory is unsustainable without reforms in revenue mobilization, expenditure prioritization, and debt management. It recommends a strategic balance between borrowing and domestic resource mobilization, restructuring high-cost debts, and channeling funds into sectors that generate long-term productivity gains.