Nigeria faces a potential surge in public debt as a revenue shortfall of about N30 trillion threatens the country’s fiscal stability.
Economist Paul Alaje made this known while speaking on News Central on Thursday.
The warning comes as government revenue targets remain unmet, raising borrowing concerns.
What Alaje said
The economist noted the difficult choices facing the government in addressing the revenue gap.
“Chances are really very high that there may be a resurgence of debt service to revenue as 30 trillion Naira revenue gap means a lot. Now, what should we do when we have this?”, he asked.
He outlined the two primary options: raising foreign debt, which can take time and put pressure on exchange rates, or increasing local borrowing through bonds and treasury bills, which could crowd out private investment and employment
He also noted the connection between interest rates and investor confidence.
“No wonder you might notice that Central Bank interest rates have not gone lower. It has been high at unprecedented figures,” he said.
Recently, Finance Minister Wale Edun had said the federal government has recorded a major revenue shortfall in the 2025 fiscal year.
Edun made the remarks on Tuesday during an interactive session with the House Committees on Finance and National Planning.
“The current trajectory indicates that federal revenues for the full year will likely end at around N10.7 trillion, compared with the N40.8 trillion that was projected,” Mr Edun told the lawmakers.
He attributed the shortfall largely to weak oil and gas revenues, particularly lower-than-expected collections from Petroleum Profit Tax and Company Income Tax paid by oil and gas companies.
The minister also cited underperformance across several non-oil revenue subheads, compounding the pressure on government finances.
In November, the Senate approved President Bola Tinubu’s request to borrow N1.15 trillion from the domestic debt market to finance the deficit in the 2025 Appropriation Act.
In September, President Tinubu said the government would stop borrowing domestically, citing non-oil revenue gains.
In September, President Tinubu said the government would stop borrowing domestically, citing non-oil revenue gains.
Tinubu stated that Nigeria had met its annual revenue target by August, attributing the achievement to robust non-oil revenue performance.
“The economy is stabilised, nobody is trading piece of paper for exchange rate anymore. We are going up. Today I’m standing before you, I can brag that Nigeria is not borrowing a dime from local banks,” Tinubu said.
“The revenue, we have met our target of revenue for the whole year, we’ve met it in August. Non-oil. If non-oil revenue is doing well, then we have no fear of whatever Trump is doing on the other side.”
The Federal Executive Council (FEC) recently approved the 2026–2028 Medium-Term Expenditure Framework (MTEF).
The government projects N34.33 trillion in revenue for 2026, including N4.98 trillion from state-owned firms.