Nigeria’s debt repayments rose significantly above budget projections in the first nine months of 2025, exceeding the approved allocation by N1.90 trillion, according to data from the Budget Office of the Federation.
The latest Budget Implementation Report shows that total debt-related payments reached N12.63 trillion between January and September, compared to a prorated budget target of N10.74 trillion, representing a 17.65% overrun.
Debt servicing alone accounted for N12.52 trillion, surpassing its allocation by more than N2 trillion, with both domestic and external repayments exceeding expectations. Domestic debt service stood at N6.23 trillion, while external payments rose to N6.30 trillion.
The report revealed that debt servicing consumed about 67% of the federal government’s retained revenue during the period, leaving limited fiscal space for salaries, infrastructure, and other government obligations.
Revenue performance also fell short of expectations, with total inflows of N18.63 trillion missing the projected target by over N12 trillion. Oil revenue shortfalls were cited as a major factor behind the underperformance.
Capital expenditure was heavily impacted, with only N3.10 trillion spent on infrastructure projects compared to a budgeted N17.58 trillion, highlighting the growing imbalance between debt obligations and development spending.
Overall, debt pressures continue to dominate Nigeria’s fiscal landscape, with borrowing and debt servicing absorbing a large share of government income while limiting investment in key sectors.
Finance officials have indicated plans to explore debt refinancing, concessional loans, and new funding sources, taking advantage of improved investor sentiment and rising oil prices. However, concerns remain about inflation risks and long-term debt sustainability.
Economists warn that Nigeria must reduce reliance on borrowing by boosting revenue generation, improving tax efficiency, selling non-core assets, and expanding public-private partnerships for infrastructure development.
They also stress the need for coordinated fiscal and monetary policies to reduce borrowing costs and ease pressure on public finances.
