Nigeria Spends ₦10.81 Trillion on Debt Service in Nine Months as Public Debt Nears ₦153 Trillion

Public Debt Nears ₦153 Trillion as Nigeria’s Debt Service Costs Escalate

Nigeria expended ₦10.81 trillion on servicing its outstanding public debt in the first nine months of 2025, official data from the Debt Management Office (DMO) show. The figure reflects both external and domestic debt obligations and comes as the nation’s total public debt stock climbed to about ₦153.3 trillion by the end of the third quarter of 2025.

Breakdown of Debt Service Payments

The DMO’s latest report shows that Nigeria’s debt service outlay for January–September 2025 comprised:

• External debt service: $3.34 billion, equivalent to roughly ₦4.49 trillion based on prevailing exchange rates.

• Domestic debt service: ₦6.32 trillion.

This combined burden reflects the recurring cost of interest and principal payments on borrowings from both international lenders and domestic creditors.

Rising Public Debt Stock

As of 30 September 2025, Nigeria’s total public debt stock stood at approximately ₦153.3 trillion ($103.9 billion), marking a quarter-on-quarter increase from ₦152.4 trillion ($99.7 billion) in June 2025.

Domestic obligations account for a significant portion of the total debt profile, with the federal government’s domestic debt rising to ₦77.81 trillion by the third quarter. Subnational entities, including the 36 states and the Federal Capital Territory (FCT), added around ₦4 trillion in domestic liabilities. External liabilities made up the remainder of the total stock.

Drivers of Debt Expansion

Analysts point to persistent budget deficits, weakened revenue collection, and currency depreciation as key drivers of the rising debt burden. The federal government has increasingly relied on borrowing to finance infrastructure projects and recurrent expenditure as fiscal pressures intensify.

Data from related fiscal frameworks indicate the government plans further borrowing to bridge widening fiscal gaps, with new loans projected for the 2026 budget cycle. In these projections, debt service costs are forecast to continue rising, underscoring the ongoing strain on public finances.

Fiscal Implications for the Economy

The scale of debt service relative to revenue has become a focal point for policymakers and investors. According to separate projections, the debt service-to-revenue ratio is expected to increase in the coming years, potentially approaching nearly one naira in every two of government revenue committed to debt costs. This raises concerns about the availability of funds for capital development and social services.

Budget analysts note that as debt servicing consumes a larger share of public resources, capital expenditure and development spending may be crowded out, exacerbating fiscal pressures and slowing growth potential.

Nigeria’s public finances are under mounting pressure as the cost of debt servicing escalates. With ₦10.81 trillion spent in the first nine months of 2025 and total public debt nearing ₦153 trillion, policymakers face critical choices about fiscal consolidation, revenue enhancement, and borrowing strategy. For investors and economic stakeholders, these developments highlight the need for robust fiscal planning and transparency in public debt management moving into the 2026 budget cycle and beyond.