The Federal Government’s debt obligations significantly exceeded its budgeted provisions in the first nine months of 2025, according to data from the Budget Office of the Federation.
Total debt-related payments, covering domestic debt, foreign debt, and sinking fund contributions, reached N12.63 trillion between January and September. This surpassed the prorated budget allocation of N10.74 trillion by N1.90 trillion, representing an overrun of 17.65%.
Debt Service Takes Lion’s Share
Debt service alone accounted for the bulk of the excess, rising to N12.52 trillion against a budgeted N10.45 trillion an overspend of N2.07 trillion (19.8%).
– Domestic debt service stood at N6.23 trillion, exceeding its allocation by N832.42 billion.
– Foreign debt service reached N6.30 trillion, N1.24 trillion above the budgeted amount.
As a result, debt servicing consumed 67.2% of the government’s retained revenue of N18.63 trillion during the period. When the sinking fund is included, debt-related payments absorbed approximately 67.8% of total revenue. This left just about N33 out of every N100 available for salaries, overheads, capital projects, and other government obligations.
Revenue Underperformance
Aggregate revenue for the nine-month period stood at N18.63 trillion, falling short of the prorated target of N30.67 trillion by N12.03 trillion (39.24%). Revenue weakness was largely attributed to persistent shortfalls in oil receipts, even as non-oil collections performed better.
Capital Expenditure Heavily Constrained
The high debt burden severely limited capital spending, which totalled only N3.10 trillion against a prorated budget of N17.58 trillion. This means debt service payments were more than four times the amount allocated to capital projects during the period.
Fiscal Deficit and Financing
The fiscal deficit for the first three quarters stood at N6.03 trillion, below the prorated target of N10.58 trillion. The deficit was financed mainly through multilateral and bilateral project-tied loans (N4.81 trillion) and domestic borrowing (N7.08 trillion).
Finance Minister Taiwo Oyedele recently indicated that the government is considering refinancing some of its more expensive debts and raising additional funds while market conditions remain favourable.
The latest figures underscore Nigeria’s persistent fiscal challenge, where rising debt servicing costs continue to absorb the majority of government revenue, leaving limited room for critical infrastructure investment and developmental spending.
