Nigeria's Debt Interest Hits N7.7tn, Capital Spending Plummets

In the first half of 2026, Nigeria's interest payments on debt reached N7.7tn, exceeding total revenue by N1.5tn, as reported in the World Bank's October 2026 Nigeria Development Update. Interest payments accounted for 124.2 per cent of the Federal Government's N6.2tn revenue from January to June.

This significant burden raises concerns about the sustainability of fiscal gains, as a large portion of available resources is directed towards servicing existing debt rather than funding new public infrastructure. Interest payments increased by N2.1tn, or 37.5 per cent, from N5.6tn in the first half of 2025.

The interest costs rose to 3.1 per cent of GDP, up from 2.5 per cent the previous year. Although revenue collections improved due to a recovery in oil receipts and stronger corporate tax collections, the Federal Government still spent more on debt servicing than it collected in total revenue.

Capital expenditure fell to approximately N700bn, representing only 0.3 per cent of GDP, while interest payments were about 11 times the amount allocated for capital projects.