Economy
Nigeria Still Safe to Borrow Additional N7.9trn—FSDH
By Dipo Olowookere
Some days ago, the Debt Management Office (DMO) released the public debt profile of the country and from their report, Nigeria’s debt stood at N24.4 trillion as at December 31, 2018.
The release of the report stirred another debate in the country, with different stakeholders appealing to federal government to reduce its borrowings.
But analysts at FSDH Research have said Nigeria still has room to borrow an additional N7.89 trillion before reaching a threshold of about N32 trillion.
In its report released this week, which was obtained by Business Post, the Lagos-based investment company said based on the fact that the public debt-to-GDP ratio of Nigeria, Africa’s largest economy, was still under 20 percent, precisely 18.89 percent, it can still get more loans to reach the 25 percent benchmark set for itself and the 56 percent international threshold set for countries in Nigeria’s peer group.
FSDH Research argued that countries like China, South Africa, India, UK and USA all have high debt-to-Gross Domestic Product (GDP) of over 50 percent, but stressed that they have successfully managed to deploy their borrowings into activities that can stimulate revenue generation including education, transportation, construction, security, technology, and other growth-enhancing infrastructure.
“By utilizing these borrowed funds in areas that improve the ease of doing business in their countries, they have been able to grow their economies further, create job opportunities, and create more avenues for their governments to grow their revenue,” the report said.
It advised the Nigerian government to diversify its revenue and create multiple sources so as to change the present narrative.
“Just as FSDH Research has suggested several times in our previous reports, there is an urgent need to expand the revenue base of the country through the growth of the non-oil sector.
“We suggest that the government should adopt strategies to increase and broaden its revenue. Some of these strategies include an increase in the tax base of the country (apart from an increase in the tax rate), removal of all administrative delays in obtaining licences and approvals (including titles to landed properties for building and agricultural purposes), the sale of unprofitable government assets and, removal of subsidies on electricity and Premium Motor Spirit (PMS).
“In addition, we emphasize that borrowing should be tied to specific projects that can improve the competitiveness of the country, such as the FGN Sukuk Bond.
“To conclude, as individuals and business entities in Nigeria, we can help government generate more revenue by paying our taxes and other dues as and when due. And government must surely reciprocate with the provision of appropriate facilities that will make life better for all,” it said.
Read the full report below
Have you ever had to borrow money and accumulate debt? Some individuals believe that debt is bad and as a result they live within their limited resources. But are debts really bad? Now, imagine that you run a chocolate-production business and you receive a large order to supply chocolates to a big customer who will surely pay you after supply.
After considering your resources, you find out that you do not have sufficient funds to purchase the raw materials required to produce the chocolates.
You are then faced with a decision to either borrow money from a willing lender to finance the operation and make your money later or not to borrow and lose the business. What will you do? It is your choice to make but borrowing is definitely a better option if the money is used for productive activities that have the capacity to pay back the debt as well as its associated interest.
Just as individuals and companies are faced with the dilemma of whether or not to borrow, countries also face the same problem.
Although it is difficult to find any country that does not borrow, there are key questions each country must ask. How much debt should they contract? What projects will the debt be used for? How will the loan be repaid on top of the associated interest? Whom should they approach to lend the money? What will be the impact of the loan servicing on the country’s ability to perform her obligations to the citizens? Some countries have shown that debt is not bad in itself. What truly matters is the productivity of the debt that is contracted.
Countries such as China, South Africa, India, UK and USA have high Debt-to-Gross Domestic Product (GDP) of over 50%. Our computation shows that despite the significant increase in Nigeria’s public debt in recent years, standing at N24 trillion, Nigeria’s Public Debt-to-GDP ratio is less that 20%. Based on this measure, Nigeria could borrow more.
The countries mentioned above, however, have managed to deploy their borrowings into activities that can stimulate revenue generation including education, transportation, construction, security, technology, and other growth-enhancing infrastructure. By utilizing these borrowed funds in areas that improve the ease of doing business in their countries, they have been able to grow their economies further, create job opportunities, and create more avenues for their governments to grow their revenue.
So, you might now be thinking, maybe debt is not bad after all. But, you must not be quick to say this. The matter of public debt must be weighed carefully and thoroughly. Just as there are countries that have done well because of increased borrowing, there are other countries whose high, unsustainable debt levels have not translated into economic development.
In reviewing Nigeria’s debt profile, FSDH Research observes that the level of debt has been on the increase over the years. As at December 2018, the total public debt increased to N24.39trillion. But this is not where the issue lies.
A further analysis shows that the Public Debt-to-GDP ratio is 18.89%, which is below the 25% benchmark the Federal Government of Nigeria (FGN) sets for Nigeria and the 56% international threshold set for countries in Nigeria’s peer group.
The 25% benchmark gives Nigeria a leeway to borrow an additional N7.89 trillion given her level of GDP. But before you are quick to celebrate, there is the need to consider one very important factor: the ability of the country to service the debt without causing untold hardship on the country.
In measuring the ability of a country to service her debt obligations, we look at the ratio of domestic debt service-to-FGN FAAC allocation.
This is where the problem lies for Nigeria. Low revenue generation makes it very difficult for the FGN to meet its debt obligations without sacrificing other important responsibilities of government.
FSDH Research notes that the current high debt service to revenue structure in Nigeria is unsustainably high and the high figure is due to the low revenue of the country. Although the strategies of the Debt Management Office (DMO) in debt management and the Central Bank of Bank of Nigeria (CBN) in monetary policy administration have reduced the interest burden of the government, Nigeria needs to accelerate revenue generation to enable it to meet all her debt obligations without stress.
The way to change this narrative is for Nigeria to diversify her revenue and create multiple sources. Just as FSDH Research has suggested several times in our previous reports, there is an urgent need to expand the revenue base of the country through the growth of the non-oil sector.
We suggest that the government should adopt strategies to increase and broaden its revenue. Some of these strategies include an increase in the tax base of the country (apart from an increase in the tax rate), removal of all administrative delays in obtaining licences and approvals (including titles to landed properties for building and agricultural purposes), the sale of unprofitable government assets and, removal of subsidies on electricity and Premium Motor Spirit (PMS).
In addition, we emphasize that borrowing should be tied to specific projects that can improve the competitiveness of the country, such as the FGN Sukuk Bond.
To conclude, as individuals and business entities in Nigeria, we can help government generate more revenue by paying our taxes and other dues as and when due. And government must surely reciprocate with the provision of appropriate facilities that will make life better for all.
By Adedapo Adesanya
The Central Securities Clearing System (CSCS) Plc has declared the first interim dividend in its history after posting its financial results for the first half of 2026, reflecting robust earnings growth, improved operating efficiency and stronger capital market activity.
The board approved an interim dividend of N1.00 per ordinary share for the six months ended June 30, 2026, citing the company’s strong cash generation, resilient balance sheet and confidence in the sustainability of its earnings.
The interim payout represents about 56 per cent of the total dividend of N1.78 per share paid for the 2025 financial year, underscoring its strong earnings momentum while preserving financial flexibility to invest in technology, innovation and future growth.
CSCS recorded one of the strongest financial performances in its history during the review period, with total operating income rising by 92 per cent to N18.51 billion from the corresponding period of 2025.
The growth was driven by higher transaction fee income as capital market activity strengthened, continued expansion in depository services, increased collateral management revenues and stronger contributions from data and technology-enabled services. Investment income also improved as the company optimised its investment portfolio.
Despite the sharp rise in revenue, operating expenses increased by only 38 per cent, reflecting disciplined cost management and the scalability of the company’s business model.
As a result, operating profit surged by 186 per cent to N10.11 billion, while profit before tax climbed by 115 per cent to N13.21 billion. Earnings per share also rose significantly to 190.1 kobo from 109.1 kobo in the corresponding period of 2025.
The organisation also recorded improvements in operating efficiency. Its cost-to-income ratio declined to 45.4 per cent from 63.2 per cent a year earlier, while operating profit margin improved to 54.6 per cent from 36.8 per cent.
According to the company, the results demonstrate not only the benefits of stronger market activity but also the resilience of its operating model and its ability to convert revenue growth into higher profitability, improved shareholder returns and sustainable long-term value creation.
Commenting on the interim dividend, the Chairman of CSCS Plc, Mr Temi Popoola, said the board’s decision reflected confidence in the firm’s financial strength, earnings quality and long-term strategic direction.
He said the strong performance was driven not only by increased market activity but also by sustained improvements in operational efficiency, disciplined cost management and the continued diversification of revenue streams.
Mr Popoola noted that the Board remained committed to balancing shareholder returns with investments in technology, innovation, resilience and new growth opportunities that would strengthen CSCS’ position as Nigeria’s leading financial market infrastructure and one of Africa’s foremost post-trade institutions.
The chief executive of CSCS Plc, Mr Shehu Yahaya Shantali, attributed the strong performance to the resilience of the entity’s business model, the dedication of its workforce and the confidence of market participants.
He said the first-ever interim dividend demonstrated the company’s ability to translate strong earnings growth and improved operating efficiency into enhanced shareholder value.
Mr Shantali added that CSCS would continue to strengthen its core market infrastructure, invest in technology and innovation, diversify its revenue base and enhance value creation for stakeholders while supporting the development of Nigeria’s capital market.
By Aduragbemi Omiyale
The national scale long-term issuer rating of Axxela Limited has been upgraded by GCR Rating to A+(NG), just as its short-term issuer rating was affirmed with a stable outlook.
The rating firm upgraded the long-term issue rating for Axxela Funding 1 Plc’s N16.4 billion series 1 senior unsecured bond to A+(NG), while the N11.5 billion series 1 senior secured bond was lifted to A+(NG)(EL).
GCR noted in a note that the actions reflect the leading gas and power portfolio company’s robust business model, strong earnings performance, and sustained financial profile, reinforcing its ability to deliver long-term value while maintaining financial discipline.
Axxela’s recent achievements have been driven by its continued focus on responsible growth, customer satisfaction, and creating lasting value for national development.
“The ratings upgrade by GCR is a strong endorsement of Axxela’s disciplined approach to business. Beyond recognising our financial strength, it reflects the resilience of our business model and the confidence in our strategic direction.
“Over the past few years, we have continued to make significant strides across the business by expanding our natural gas infrastructure, strengthening our operational footprint, advancing our sustainability agenda, and maintaining an unwavering commitment to operational excellence and safety,” the chief executive of Axxela, Mr Moshood Olajide, commented on the development.
As the company continues to advance its long-term growth strategy, the upgraded ratings reinforce confidence in Axxela’s credit profile, financial resilience, and ability to create enduring value for investors, customers and other stakeholders.
By Adedapo Adesanya
The Ministry of Solid Minerals Development and the National Identity Management Commission (NIMC) have strengthened their partnership to deploy digital identity technology, aiming to combat illegal mining and enhance security in Nigeria’s mining sector.
Speaking while receiving the Director-General and management of NIMC on a courtesy visit to his office in Abuja, the Minister of Solid Minerals Development, Mr Dele Alake, described the commission as a critical institution in Nigeria’s development architecture, stressing that effective governance could not be achieved without a credible identity management system.
“NIMC occupies a critical position in translating policy into reality. It is pivotal to the development of any nation because governance today is driven by data, technology and credible identity systems,” he added.
He noted that inadequate identification systems had weakened enforcement efforts over the years, allowing illegal mining activities to flourish in mineral-rich communities.
“Without identification, we cannot trace or track, and insecurity will flourish. In the solid minerals sector, we need effective monitoring of both legal and illegal operations.
“A credible identity ecosystem will strengthen regulation, improve enforcement and support our efforts to sanitise the sector,” Mr Alake said.
The minister identified technology, statistics, data gathering and digital identity as critical enablers for evidence-based policymaking, improved regulatory oversight, efficient licensing, investment promotion and national development.
On her part, the DG of NIMC, Mrs Abisoye Coker-Odusote, highlighted several opportunities for collaboration between both institutions, noting that the newly enacted NIMC Act has positioned Nigeria to fully embrace a digital governance ecosystem.
She explained that deeper integration of identity management into the solid minerals sector would facilitate database integration across government institutions, enhance regulatory compliance, strengthen security and law enforcement, improve monitoring of operators, and provide stronger support for the implementation of Community Development Agreements (CDAs) in mining host communities.
Mrs Coker-Odusote added that NIMC’s upgraded digital infrastructure is capable of supporting government institutions in building reliable databases, improving transparency and delivering more efficient public services.
Both institutions said they would immediately begin implementing technology-driven initiatives under the partnership, expressing confidence that expanding access to trusted digital identities for miners and other eligible residents would enhance accountability and strengthen governance in the solid minerals sector.
