Nigeria’s federal authorities, beneath the administration of Bola Tinubu, is on the right track to spend greater than N91 trillion on debt service between 2023 and 2028.
The dimensions of money owed highlights the mounting price of public borrowing amid persistently weak income efficiency.
This estimate relies on a assessment of debt service provisions within the 2023 and 2024 budgets, the 2025 Appropriation Act, and ahead projections contained within the Medium-Time period Expenditure Framework (MTEF) for 2026–2028.
The size of projected debt service additionally displays a mix of rising fiscal deficits, a quickly increasing debt inventory, and elevated rates of interest—situations which have intensified since 2023.
What the information is saying
Federal Authorities debt service obligations have risen sharply in each budgeted and precise phrases.
- In 2023, the federal government budgeted N6.56 trillion for debt service however ended the yr having spent N8.56 trillion, overshooting the goal by about N2 trillion.
- The sample worsened in 2024, when budgeted debt service of N8.27 trillion ballooned to an precise outturn of N12.63 trillion.
- For 2025, the federal government has budgeted N14.32 trillion for debt service.
- Nevertheless, by the tip of the primary seven months, precise debt service incurred had already reached N9.8 trillion, exceeding the pro-rated goal of N8.35 trillion.
If this trajectory holds, precise spending will as soon as once more surpass the full-year estimate.
- Wanting forward, the MTEF tasks debt service of N15.9 trillion in 2026, rising additional to N19.8 trillion in each 2027 and 2028.
- Taken collectively, whole budgeted debt service for the six-year interval stands at N84.6 trillion, however previous expertise suggests the eventual determine may exceed N91 trillion.
Capital expenditure squeezed
Whereas the federal government plans to spend N114.8 trillion on capital expenditure over the identical interval, precise capital releases have persistently fallen behind debt service funds.
- In 2023, capital spending got here in at N6.3 trillion, considerably decrease than the N8.56 trillion spent on debt service.
- The hole widened in 2024, when capital expenditure once more lagged debt service by N11.5 trillion, as curiosity and principal repayments consumed a rising share of presidency assets.
- The scenario has deteriorated additional in 2025. Professional-rated capital expenditure for the primary seven months stands at simply N3.59 trillion, in contrast with a pro-rated price range expectation of N13.6 trillion.
This implies that capital tasks are as soon as once more bearing the brunt of fiscal strain as debt obligations take precedence.
Income weak spot
Nigeria’s rising debt service burden is essentially linked to weak and unstable authorities revenues, which have did not preserve tempo with spending ambitions.
- In 2023, precise income of N12.48 trillion barely exceeded the price range. Nevertheless, the advance proved short-lived.
- In 2024, precise income fell to N20.98 trillion, undershooting the price range by practically N5 trillion and forcing the federal government to borrow extra to bridge the hole.
- For 2025, early indicators are troubling. Professional-rated precise mixture income for the primary seven months is estimated at N13.6 trillion, far beneath the pro-rated price range expectation of N23.8 trillion.
If this development persists, Nigeria dangers ending the yr with a considerably increased debt service-to-revenue ratio, a key sign of fiscal stress.
Rising debt and excessive rates of interest
Past income shortfalls, Nigeria’s debt service prices are being amplified by a rising debt inventory and elevated borrowing prices.
- Home debt has expanded from N54.3 trillion in 2022 to N80.5 trillion, reflecting elevated reliance on native borrowing.
- Exterior debt has additionally risen, climbing from $41.6 billion to $46.9 billion, including international change publicity to servicing obligations.
- On the identical time, the Central Bank of Nigeria’s extended hawkish financial stance has pushed authorities borrowing charges above 20% in recent times.
This considerably will increase curiosity prices on new and refinanced debt.
Significance of those developments
Nigeria is more and more locked right into a fiscal construction the place debt service grows quicker than income.
Thus, crowding out capital spending and limiting the federal government’s capacity to spend money on infrastructure, healthcare, schooling, and productivity-enhancing sectors.
Until income reforms ship sustained positive aspects—or borrowing prices fall meaningfully, debt service is prone to stay the one largest declare on public funds all through the present administration’s tenure.