Debt Servicing Is The Highest Public Expenditure In Nigeria, 2026
PRESIDENT Tinubu has paid more attention to the borrow plan section of Nigeria’s budgets 2024-2026 and he has fully implemented the borrow plans. President Bola Tinubu’s administration uses deficit financing and external/domestic borrowing as part of its fiscal strategy to bridge budget shortfalls and fund large-scale recurrent expenditure leading to frequent public and legislative debates over the country’s rising debt profile. Federal budgets under the current administration, such as the 2025 and 2026 fiscal frameworks, feature multi-trillion-naira gaps between projected revenues and total expenditures that require borrowing to implement. The National Assembly routinely reviews and approves external and domestic borrowing plans encompassing billions of dollars alongside multi-billion-naira domestic bonds.
Nigerians are worried over huge funds used to service public debts in Nigeria, 2026. Nigeria allocates roughly ₦15.81 trillion in 2026 to public debt servicing in its federal budget, representing nearly a quarter of total spending and consuming a massive share of government revenue. This makes debt obligations one of the largest single claims on national public funds
Debt service rivals or exceeds major capital and infrastructural allocations in the national budget. Revenue for debts service is higher than revenue for capital projects. President Bola Tinubu’s administration has signed both the ₦54.99 trillion 2025 budget and the ₦68.32 trillion 2026 appropriation bill into law. However, critics and lawmakers have heavily criticized the administration for delayed implementation, overlapping budget cycles, and repeated extensions of capital spending rather than total failure to enact them. Three years into Tinubu’s government, 2024, 2025 and now 2026, the budgets for capital projects have not been implemented. President Tinubu has never implemented a budget. How does a country run without a budget?
Revenue Pressure: A significant portion of incoming government revenue goes directly to domestic and external lenders, squeezing funds available for health, education, and social services in 2026. Three years of persistent budget deficits and continuous borrowing drive up the total public debt stock, causing repayments to scale upward correspondingly.
Nigeria’s debt service-to-revenue ratio hovers between 50% and 60%, a notable improvement from historic peaks approaching nearly 97% under prior fiscal pressures, though it remains well above the global recommended threshold of 33%.
Nigeria’s total public debt service for the full year 2025 rose to approximately ₦16.26 trillion, up from about ₦13.02 trillion in 2024. This total reflects both domestic interest payments and a foreign external debt service component of $5.21 billion, driven by high domestic interest rates and exchange rate pressures
Total Debt Service: Reached roughly ₦16.26 trillion over the 12-month period, with quarterly payments peaking heavily toward the end of the year.
External Debt Service: Totaled $5.21 billion according to official data from the Central Bank of Nigeria via Nairametrics, marking an 11.9% increase from 2024.
Public Debt Stock: Total public debt climbed past ₦152.40 trillion by mid-2025, as tracked by the Debt Management Office.
Revenue Impact: Debt service continued to consume a massive share of government generated revenue, restricting fiscal space for capital projects, public services, and infrastructure. Nigerian public debt and high debt-service costs are criticized as a major threat to economic stability and national security. The aggressive borrowing by the federal government under President Bola Tinubu—pushing public debt past N149 trillion—reduces vital spending on health, education, and infrastructure, while risking a severe fiscal crisis.
It is worrisome that President Tinubu is taking more loans despite the fact that Nigeria is having problems with the increasingly high cost of debt servicing. Debt servicing is taking more than 27 percent of Nigeria’s 2025 budget. Nigeria’s debt is about $100 billion, with $45.9 billion in external debt and $51.2 billion in domestic debt.
The budget for debt servicing is more than the budget of education, health and defence put together in the 2025 budget. President Tinubu is paying more attention to obtaining more loans and less attention to the economic consequences of the high cost of debt servicing in Nigeria.
Since assuming office in May 2023, President Bola Ahmed Tinubu has presided over what is becoming one of Nigeria’s most aggressive borrowing campaigns in recent history. In just two years, Nigeria has secured $29.2 billion in loans, a massive financial commitment that will shape the nation’s economic trajectory for decades. While many Nigerians seem focused on day-to-day survival, the mounting debt quietly grows in the background, accruing interest and setting the stage for future repayment by citizens, including those yet unborn. Tinubu’s $29.2 Billion Debt Train: Who’s Driving, and Who’s Paying?
Nigeria’s increasing loans and high cost of debt-servicing obligations pose a significant risk to the country’s economic stability and development. Public debt has surged rapidly in favour of unproductive rather than productive capital projects. This cycle has been exacerbated by the devaluation of the naira and persistent fiscal deficits. As of the first quarter of 2025, Nigeria’s public debt stood at ₦149.39 trillion, a sharp increase from ₦121.7 trillion in the same period of 2024. The Debt Management Office (DMO) reported that domestic debt comprised ₦78.76 trillion (52.7%) of this total, while external debt was ₦70.63 trillion (47.3%). This places the country’s debt-to-GDP ratio at 52 percent, a level that exceeds the legal threshold of 40 percent. According to a forecast by BudgIT, total public debt could reach ₦187.79 trillion by the end of 2026.
Nigeria’s debt service to revenue ratio (DS/RR) has been a significant concern, but recent reform efforts have shown no improvement, though it remains high by international standards.
President Tinubu stated in November 2024 that the ratio dropped to 65 percent from about 97 percent when he took office in May 2023, though the AfDB reported it rose to 77.5 percent in 2024. The World Bank recommends a ratio not exceeding 22.5 percent, highlighting Nigeria’s challenges in managing its debt service obligations relative to its revenue. World Bank benchmark: The World Bank suggests a ratio below 22.5 percent as a sustainable level. Nigeria’s debt servicing ratio reached critical levels, sometimes exceeding 97 percent (meaning nearly all revenue went to debt servicing).
Nigeria’s debt is worrisome because the public debt stock reached 149.39 trillion naira (approximately US$97 billion) by Q1 2025, a significant increase from the previous year. This brought the debt-to-GDP ratio to 52 percent, exceeding the 40 percent legal limit and raising concerns about the country’s fiscal sustainability and its ability to service its debt. Experts and lawmakers are alarmed by the rapid debt growth and the low returns on borrowed funds, which may require urgent parliamentary attention, transparent practices, and fiscal reforms to avoid potential economic catastrophe.
Inwalomhe Donald writes via inwalomhe.donald@yahoo.com
