Recently, headlines across the country have featured the rising sovereign debt in the nation. Many Nigerians are concerned about this issue, and are particularly interested in knowing why so much has been borrowed, and how we are going to service the rising national debt. Some consider sovereign debt to include just the liabilities of the central government; some extend this to also include the debts of the Central Bank. Finally, some people use the term sovereign debt interchangeably with the term public debt and public debt interchangeably with the term government debt but these may not refer to the same thing. In this paper, sovereign debt will simply be defined as debt issued by the national government in a foreign currency in order to finance the issuing country’s growth and development. It can either be internal debt or external debt. Internal debt is debt owed to lenders within the country, while external debt is debt owed to foreign entities.  Sovereign debt can also be categorised based on when the repayments are due. Short term debt typically last for less than a year, while long term debt typically takes over 10 years before repayment is necessary. According to the National Bureau of Statistics, Nigeria’s external debt has been rising rapidly over the last 3 years, Data from the Debt Management Office (DMO) showed that Nigeria’s total debt increased by about 90 per cent in almost three years, from about N12.6 trillion in December 2015 to about N22.4 trillion as at June. The debt management office said that the rise in total debt stock was recorded after the federal government issued a $2.5 billion Eurobond in February. This rising debt has raised concerns from national and international observers. The World Bank Group and the International Monetary Fund (IMF) recently cautioned the federal government over its excessive borrowing. The Vice President of World Bank Africa, Mr Hafez Ghanem, urged the government to reduce its borrowing and tap into private investments that would yield multiplier effects on various sectors of the economy. Nigeria needs to increase its revenue base or take more concessional loans with less debt servicing commitments. This will require reducing domestic loans being taken, and focusing more on taking foreign based loans. One reason why this is important is because domestic loans typically have shorter repayment periods and tend to have high interest rates. Reports claim that the federal government has yielded to the recommendation to borrow more from the foreign debt market because of the huge service payment on domestic debt, and it has plans to borrow $3bn from foreign sources to refinance some local debts. This strategy will involve reducing the country’s domestic debt to 60 per cent, while raising the external component to 40 per cent. But should the country even be borrowing more at this point? Yes it is important for a developing country like Nigeria to borrow to finance its development, particularly large infrastructural development projects. The question however is, will the debt actually finance what the budget claims it will? These are questions that were not asked in Zambia, and now the country is in the middle of an all out debt crisis with public debt hitting a record high of over 59% of GDP. Although the Zambian government claims that it has spent the money on much needed capital investments such as infrastructure, there is now evidence to show that this was not the case. According to the economist, “Much of the money Zambia borrowed was squandered or stolen. Bigwigs skimmed from worthy-sounding contracts. When the country bought bright new fire- engines their price somehow ballooned by 70%, to more than $1m each. Its new roads mysteriously cost twice as much per kilometre as its neighbours’. Its new airport terminal was designed to accommodate an improbable ten-fold jump in traffic”.Nigeria has these same tendencies for corruption, and if nothing is done to manage the rising debt, the nation could end up in the same situation as the Zambia, struggling under a debt service burden too heavy to bear.