Debt Management and Fiscal Sustainability in Nigeria: A Comparative Analysis of the Fuel Subsidy and Post-Subsidy Regimes, 2015-2025

This study examines debt management and fiscal sustainability in Nigeria by comparing the fuel subsidy regime (2015–2022) with the post-subsidy regime (2023–2025). It assesses trends in public debt, government revenue, fiscal deficits and debt servicing, focusing on the implications of petrol subsidy removal in May 2023. The study is anchored in Fiscal Sustainability Theory, which examines whether government can meet its financial obligations without persistent deficits or unsustainable debt accumulation. The study adopts a qualitative and comparative approach, drawing on secondary data from official publications and reports of the Debt Management Office, Central Bank of Nigeria, Federal Ministry of Finance, World Bank and International Monetary Fund. Qualitative content analysis and descriptive comparison are used to examine fiscal trends across the two periods. Findings show that public debt rose from ?12.60 trillion in 2015 to ?46.25 trillion in 2022, while petrol subsidy payments reached ?4.532 trillion in 2022. Subsidy costs intensified fiscal pressures, although they were not the sole cause of rising debt. After subsidy removal, public debt increased from ?97.34 trillion at the end of 2023 to ?159.28 trillion at the end of 2025. Although Federation revenue increased and the consolidated fiscal deficit declined in 2024, debt continued to rise amid exchange-rate depreciation, additional borrowing and recognition of earlier liabilities. Interest payments rose from 40.8 per cent of federal government revenue in 2024 to an estimated 53.2 per cent in 2025. The study concludes that subsidy removal created opportunities for fiscal adjustment but did not independently ensure fiscal sustainability. It recommends stronger domestic revenue mobilisation, prudent borrowing, transparent reporting of subsidy savings and improved expenditure management.