FG spends N8.94 trillion on debt servicing in nine months – CBN 

The amount represents a 56.8% increase from the N5.69 trillion spent in the same period of 2023.

This is according to an analysis of data from the quarterly statistical bulletin of the Central Bank of Nigeria (CBN).

The rising debt servicing cost highlights the growing burden of Nigeria’s debt obligations amidst widening fiscal deficits.

The debt-to-revenue ratio rose significantly, with debt servicing consuming 147% of retained revenue in the first nine months of 2024. This compares unfavorably to 2023, when the ratio stood at 132%.

The government retained N6.08 trillion in revenue during the period, while debt servicing costs overshadowed this figure. This trend indicates an increasing reliance on borrowing not just for budgetary operations but also for servicing existing debts.

Recurrent expenditure rose sharply to N15.11 trillion in the first nine months of 2024, up by 45.6% from N10.38 trillion in the same period of 2023. Key components of recurrent spending included:

Capital expenditure also increased, rising by 20.8% to N3.86 trillion, compared to N3.19 trillion in 2023. However, the growth in capital spending remained modest compared to recurrent expenditure, underscoring how rising debt obligations continue to crowd out critical investments in infrastructure.

The fiscal deficit expanded by 39.3%, rising from N9.25 trillion in the first nine months of 2023 to N12.89 trillion in the same period of 2024.

This growing deficit reflects the persistent gap between government revenue and expenditure, compounded by escalating debt servicing costs.

During Nigeria’s 64th Independence Anniversary broadcast, President Bola Tinubu stated that his administration had reduced the debt service-to-revenue ratio from 97% to 68%.

He emphasized the need to end the cycle of borrowing to finance public spending and stressed that the country could not sustain a situation where 90% of revenue was spent on debt servicing.

The growing debt servicing burden, widening fiscal deficit, and declining fiscal space raise concerns about Nigeria’s fiscal sustainability.