Nigeria’s Federal Government spent N3.14 trillion servicing domestic debt in the first quarter of 2026, taking a significant share of the revenue generated from major non-oil sources during the period.
Data from the Debt Management Office (DMO), National Bureau of Statistics (NBS) and Nigeria Customs Service (NCS) showed that Customs duties, Value Added Tax (VAT) and Company Income Tax (CIT) jointly generated about N7.14 trillion between January and March.
This means roughly N44 out of every N100 generated from the three revenue sources went towards domestic debt servicing.
The development highlights the growing pressure debt obligations are placing on government finances as authorities seek to increase revenue and create enough funds for infrastructure, social programmes and other public needs.
Nigeria’s total public debt stood at N159.35 trillion as of March 31, 2026, according to the DMO. Domestic debt accounted for N87.40 trillion, representing 54.85 per cent of the total, while external debt stood at N71.95 trillion, or 45.15 per cent.
Domestic debt servicing increased throughout the quarter. The Federal Government spent N741.82 billion in January, N967.67 billion in February and N1.43 trillion in March.
Interest payments made up most of the N3.14 trillion expenditure, reaching N2.97 trillion, while principal repayments accounted for N169.68 billion.
Government bonds were responsible for the largest portion of interest payments. Interest on Federal Government of Nigeria bonds reached N1.962 trillion, while Nigerian Treasury Bills accounted for N1.003 trillion. Another N4.24 billion was spent on interest payments for FGN Savings Bonds.
March recorded the highest monthly debt-servicing cost, with N1.43 trillion spent during the month. Of this amount, N1.28 trillion went to interest payments, while N154.23 billion was used for principal repayments.
Meanwhile, government revenue agencies recorded mixed performances during the period.
The Nigeria Customs Service generated N3.35 trillion in the first quarter, representing 30.25 per cent of its N11.074 trillion target for the year. The Customs Service said reforms, modernisation and improvements in its collection systems contributed to the performance.
VAT revenue also increased during the quarter. According to the NBS, VAT collections reached N2.42 trillion, up 9.98 per cent from N2.20 trillion in the fourth quarter of 2025. Compared with the first quarter of 2025, VAT revenue increased by 17.06 per cent.
However, Company Income Tax recorded a decline. CIT revenue fell to N1.37 trillion in Q1 2026, compared with N1.49 trillion in the previous quarter and N2.06 trillion in the same period of 2025.
Beyond domestic obligations, Nigeria also spent $954.06 million servicing external debt during the first quarter. The amount included $308.33 million in principal repayments, $623.22 million in interest and $22.50 million in other charges.
The figures underline the challenge facing the Federal Government as it tries to improve revenue collection while managing a large debt burden.
With debt servicing consuming a substantial portion of government income, increasing non-oil revenue, widening the tax base and reducing dependence on borrowing are likely to remain important priorities for Nigeria’s fiscal management.
