Nigeria’s federal government is carrying N7.84 trillion in contingent liabilities, obligations that could become real debt if guarantees are called or projects fail, on top of a public debt stock of N166.79 trillion.
The contingent liabilities were recorded as of June 30, 2026, according to Debt Management Office data analyzed by Cowry Research. They are not counted in the debt stock because they are potential, not currently recognized, obligations.
What makes up the N7.84tn
The largest exposures are N2.74 trillion tied to collateral for a Total Return Swap, N1.88 trillion in power sector obligations under put call option agreements, N1.18 trillion linked to the Bank of Industry and N805 billion for the Lekki Deep Sea Port.
Those four items add up to about N6.6 trillion, or roughly 84% of the total. Data available did not itemize the remaining N1.2 trillion.
The Total Return Swap is a $1.5 billion instrument listed in the commercial portion of Nigeria’s external debt. Power sector exposure arises from put call option agreements, which can oblige the government to buy out investors under agreed conditions.
Contingent liabilities matter because they can turn into spending quickly. A guarantee that is called, a project that fails to pay or a counterparty that defaults moves the cost from a footnote to the budget.
Pressure on top of the debt
The headline debt stock rose to N166.79 trillion at the end of June from N159.35 trillion in March. Domestic debt was N91.59 trillion, or 54.91%, and external debt N75.20 trillion, or 45.09%. In dollar terms, total debt was $120.93 billion.
The cost of carrying that debt is climbing. The World Bank’s October Nigeria Development Update shows federal interest payments of N7.7 trillion in the first half of 2026, up from N5.6 trillion a year earlier, while federal revenue rose to N6.2 trillion from N3.6 trillion.
The finance ministry disputes the comparison, saying it mixes levels of government and leaves out agency revenue not yet remitted. It points to the World Bank’s projection that full year debt service, including principal, would equal 46% of revenue, and says the falling half year interest to revenue ratio shows reforms are working.
What could ease or worsen the risk
A 350 basis point rate cut by the Central Bank of Nigeria could lower borrowing costs over time, though it does not shrink the existing debt. The benefit depends on how far lower policy rates feed through to bond and treasury bill yields.
Currency risk matters too. External debt stands at $54.52 billion, including $18.55 billion in Eurobonds, so a weaker naira raises the local cost of every dollar owed.
Another $22.11 trillion of the federal bond stock represents securitized central bank advances, a reminder that past borrowing from the central bank has already been turned into formal debt.
The N7.84 trillion is not a bill due today. It is a measure of how much risk sits behind Nigeria’s balance sheet, in swaps, power contracts and project guarantees, and a reason fiscal planning has to look beyond the headline debt number.
