Nigeria spent N13.12tn on debt servicing in 2024, marking a sharp 68 per cent increase from the N7.8tn recorded in 2023. This surge highlights growing fiscal pressure amid rising interest rates and a weakening naira, according to newly released data from the Debt Management Office.
For the 2025 fiscal year, the Federal Government has proposed **N16tn** for debt servicing, underscoring concerns over the country’s escalating debt burden.
The spike in debt servicing costs was driven by increased domestic borrowing and global interest rate hikes. Externally, Nigeria spent **$4.66bn** — about **N7.15tn** at the prevailing exchange rate of N1,535.32/$1 — on servicing its foreign debts. This marks a **167% jump** from the N2.57tn paid in 2023.
Analysts point to the naira’s depreciation and elevated global borrowing costs as key contributors to the rise in external debt servicing expenses.
On the domestic front, Nigeria’s debt servicing bill climbed to **N5.97tn** in 2024, a **36.27% increase** from N4.38tn in 2023. This rise amounts to an additional N1.59tn in spending.
Federal Government Bonds were responsible for the largest share of domestic debt servicing, accounting for **N4.69tn**, which represents **78.59%** of the total domestic repayment figure.
As the country grapples with limited revenue growth and increasing debt obligations, fiscal analysts warn that Nigeria’s ability to fund capital and social projects may continue to be constrained by its rising debt service costs.
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