Nigeria’s promissory notes fell by 15.6% quarter-on-quarter between December 2024 and March 2025, according to the Debt Management Office (DMO).
According to the DMO, the notes fell from N1.542 trillion to N1.301 trillion, reflecting the recent federal government’s efforts to settle verified obligations and improve confidence among key stakeholders in the economy.
This also represents a 17.1% decrease year-on-year from March 2024 to March 2025, DMO data stated.
A promissory note is a legal instrument in which one party commits in writing to pay a specific sum of money to another party, either at a fixed or determinable future date or on demand, under agreed terms and conditions.
Last week, the Federal Government announced plans to clear outstanding payments owed to contractors who have duly completed verified projects across Ministries, Departments, and Agencies (MDAs).
A statement from the Office of the Accountant General of the Federation (OAGF), last week, stated, “The Federal Government has records of contracts executed by MDAs and is meticulous in the payment for these contracts to guarantee value for money spent.
“Efforts are underway to pay for contracts duly awarded and completed according to specifications”, the OAGF said.
FG struggled to redeem maturing promissory notes, debt obligations
In January 2025, Nairametrics reported that the Federal Government was facing challenges redeeming maturing promissory notes and other debt obligations, as the Central Bank of Nigeria (CBN) declined requests for overdrafts. Sources warned that some promissory notes due imminently could face the risk of default if alternative funding is not secured.
In April, the Director-General of the DMO, Patience Oniha, attributed Nigeria’s rising debt profile to a combination of factors, including new borrowings and the continued issuance of promissory notes to settle obligations without sufficient revenue backing.
Oniha said that although borrowing is an accepted form to fund government activities, there should be revenues generated to support such.
“There are new borrowings for the budget, states, and federal government will borrow, ways and means will be approved, and all.
“What triggers debts and why the debt stock keeps growing is because when the debt stock is growing, debt service also grows.
“The government has been issuing promissory notes to settle obligations for which it doesn’t really have the revenue. So, that is why the debt stock has been growing,” she noted.
Domestic debt nears N79 trillion, driven by fresh borrowings
According to the DMO, the domestic component of Nigeria’s debt increased to N78.76 trillion at the end of March 2025.
This reflects a year-on-year increase of N13.11 trillion or 20% from N65.65 trillion in March 2024. On a quarterly basis, domestic debt rose by N4.38 trillion or 5.9%, up from N74.38 trillion in December 2024.
Further breakdown of the data shows FGN bonds increased from N55.4 trillion to N59.8 trillion; Treasury Bills N12.4 trillion to N12.7 trillion; and FGN saving bonds from N72.9 billion to N82.7 billion.
FGN Sukuk and Green Bonds remained at N992.6 billion and N15 billion, respectively, during the period under review.
External debt climbs to N70.63 trillion
Nigeria’s external debt as of March 31, 2025, stood at N70.63 trillion, a significant jump from N56.02 trillion in the same period in 2024.
- This represents a year-on-year increase of N14.61 trillion or 26.1%. In quarter-on-quarter terms, external debt rose modestly from N70.29 trillion in December 2024, a marginal increase of N344 billion or 0.5%.
External debt obligations include borrowings from multilateral institutions such as the World Bank and the African Development Bank, bilateral sources, and commercial creditors, including Eurobond investors.
The burden of servicing these debts in naira terms has become heavier as the local currency continues to slide in value, a trend that could deepen if reforms aimed at stabilising the currency do not yield results.
