AGS NEWS – Debt servicing took up 47% of the Federal Government’s total expenditure in the first nine months of 2024, according to data from the Central Bank of Nigeria (CBN).

The government spent ₦8.94 trillion on debt payments during this period, a 56.8% rise from ₦5.69 trillion spent in the same timeframe in 2023.

Out of the ₦18.97 trillion total expenditure for the period, nearly half was allocated to debt servicing, compared to 42% in 2023.

This growing burden highlights Nigeria’s heavy reliance on borrowing to fund its budget.

The debt-to-revenue ratio also worsened, with debt payments consuming 147% of the government’s retained revenue of ₦6.08 trillion in 2024, up from 132% in 2023.

Analysts warn this trend indicates the country is borrowing not only to fund its budget but also to repay existing debts, raising concerns about fiscal sustainability.

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Recurrent spending, including salaries, pensions, and transfers, rose by 45.6% to ₦15.11 trillion in 2024.

However, capital expenditure, which funds infrastructure, increased modestly by 20.8% to ₦3.86 trillion, far overshadowed by recurrent and debt servicing costs.

The fiscal deficit widened by 39.3% to ₦12.89 trillion in 2024, underscoring the gap between revenue and spending.

The International Monetary Fund (IMF) has urged Nigeria to increase revenue through better tax collection and broaden its tax base to reduce its dependence on borrowing.

President Bola Tinubu had earlier pledged to lower the debt service ratio and reduce overreliance on loans.

However, experts note that Nigeria’s debt obligations leave limited funds for infrastructure and development projects, stressing the need for sustainable fiscal policies.