Nigeria's Debt Servicing Hits 67% of Revenue in 2025

In the first nine months of 2025, the Federal Government of Nigeria allocated 67% of its total revenue, amounting to ₦12.52 trillion, to debt servicing. This significant expenditure highlights the mounting pressure on public finances, as every ₦100 earned by the government resulted in ₦67 used for repaying existing debt obligations.

The report indicates that debt servicing remains the largest expenditure obligation of the federal government, severely limiting fiscal flexibility. Revenue performance during this period was uneven, with oil earnings falling significantly below budget expectations, while non-oil collections provided some support.

The budget office attributed the weak oil performance to issues such as crude theft, pipeline vandalism, and lower international crude prices. Despite the challenges, ongoing fiscal reforms aim to broaden Nigeria's revenue base and reduce dependence on crude oil earnings.

However, the elevated debt servicing obligations continue to constrain the government's ability to fund key sectors, raising concerns among analysts about the allocation of government income.