Nigeria’s Federal Government is projected to spend more than N91 trillion on debt servicing between 2023 and 2028, highlighting mounting fiscal pressure driven by weak revenue growth, rising borrowing, and elevated interest rates.
The estimate is based on budgeted and actual debt service figures from the 2023 and 2024 fiscal years, provisions in the 2025 Appropriation Act, and forward projections contained in the Medium-Term Expenditure Framework (MTEF) for 2026–2028.
Data show that debt service costs have consistently exceeded budget targets. In 2023, the government budgeted N6.56 trillion for debt servicing but ended the year spending about N8.56 trillion. A similar pattern emerged in 2024, when actual debt service rose to N12.63 trillion, well above the N8.27 trillion initially approved.
For 2025, debt service has been pegged at N14.32 trillion. However, payments of about N9.8 trillion had already been recorded within the first seven months of the year, surpassing the pro-rated budget estimate and raising concerns that full-year spending could again exceed projections.
Looking ahead, the MTEF forecasts debt service costs of N15.9 trillion in 2026, increasing to N19.8 trillion in both 2027 and 2028. Although cumulative budgeted debt service for the six years stands at roughly N84.6 trillion, analysts warn that persistent overspending could push the final figure beyond N91 trillion.
The rising debt burden has increasingly crowded out capital expenditure. In 2023, capital spending of N6.3 trillion fell short of debt service payments, a gap that widened significantly in 2024. The trend has continued in 2025, with capital releases lagging far behind budget expectations, raising concerns about infrastructure delivery and economic growth.
Economists attribute the pressure largely to weak and volatile government revenues. Revenue shortfalls in 2024 and early 2025 have forced additional borrowing, further increasing debt service obligations.
Experts also point to the expanding debt stock and high interest rates as key drivers of rising costs, warning that without sustained revenue reforms or lower borrowing costs, debt service will remain the largest claim on public finances.
