Nigeria's Subsidy Savings Eroded by Rising Debt Servicing Costs, CFG Advisory Warns

CFG Advisory has cautioned that Nigeria's subsidy savings from the removal of fuel subsidies are being offset by increasing debt servicing costs, leaving the government with limited capacity to fund development projects and social interventions. The country's public debt, estimated at $100 billion, has reached unsustainable levels, putting significant pressure on public finances.

The advisory firm highlighted the structural proposals in the 2026 budget, where debt servicing allocations exceeded key sectors like security, defense, education, and health combined. This excessive fiscal spending has led to persistent budget deficits and weakened social intervention programs, causing frustration among households and businesses.

CFG Advisory emphasized the need for stronger coordination across monetary, fiscal, trade, and industrial policies to sustain Nigeria's economic recovery.