Nigeria’s debt servicing overshoots budget, hits N1.3trn in 2 months

 

 

Maureen Aguta

 

A review of Nigeria’s economic report for January 2025 has shown that the country spent N1.3trillion on debt servicing between December 2024 and January 2025.

According to the document, N696 billion was spent in December 2024 and another N696 billion in January 2025.

This development indicates that the country exceeded its monthly average budget for debt servicing. The budgeted figure stood at N689 billion.

Further review reveals that zero naira was spent on capital expenditure in January 2025, according to the economic report published by the Central Bank of Nigeria.

The retained revenue of the Federal Government stood at N483 billion for January 2025, while aggregate expenditure totalled N1.617 trillion.

The document also shows that an overall budget deficit of N1.133 trillion was recorded in January 2025.

A review of data published by the Debt Management Office (DMO) showed that, within 19 months of President Bola Tinubu administration, the Federal Government of Nigeria’s debt portfolio increased by N55.2 trillion.

This comes despite repeated promises by the government that Nigeria would become less reliant on loans.

For instance, in August 2023, while inaugurating the Presidential Committee on Tax Reforms, President Tinubu vowed to reduce Nigeria’s dependence on borrowing for public expenditure.

The State House website published the following statement in August 2023:

“President Bola Tinubu in Abuja expressed his resolute commitment to break the vicious cycle of over reliance on borrowing for public spending, and the resulting burden of debt servicing it places on the management of Nigeria’s limited government revenues.”

Despite these stated intentions, the Tinubu administration appears relentless in expanding the country’s debt portfolio.

A review shows that as of June 30, 2023 — the end of Tinubu’s first month in office — the external debt of the Federal Government of Nigeria stood at N29.8 trillion (excluding debts owed by states and the Federal Capital Territory).

By December 31, 2024, however, the external debt owed by the Federal Government alone had grown to N62.917 trillion, indicating an increase of N33.1 trillion in just 18 months.

On the domestic front, the Federal Government’s debt stood at N48.3 trillion as of June 2023. By December 2024, this had increased to N70.4 trillion — a growth of N22.1 trillion.

In total, the debt owed by the Federal Government (excluding debts owed by states and the FCT) increased by N55.2 trillion by the end of December 2024.

An earlier review of the Q4 2024 economic report released by the Central Bank of Nigeria revealed that the government spent N2.199 trillion on debt servicing in Q4 2024.

This figure exceeded both the N2.067 trillion budgeted for debt servicing in Q4 2024 and the N2.055 trillion spent in Q3 2024.

Moreover, Q4 2024 debt servicing expenditure surpassed that of the same period in 2023, when N1.876 trillion was spent.

The report also noted that Nigeria’s total public debt stock stood at 51.29 per cent of Gross Domestic Product (GDP) — about 18 per cent below the 70 per cent threshold for market-access countries.

“At end-September 2024, public debt stock remained within the 70.00 per cent threshold for Market-Access Countries.”