- Nigeria spends far more on debt servicing than on health and education, a new report says
- ActionAid accused the IMF of promoting policies that weaken social spending
- The group called for major reforms to improve funding for essential public services
Nigeria spends almost five times more of its revenue on servicing external debt than it does on healthcare and education combined, according to a new report released by ActionAid International and ActionAid Nigeria.
The report, published on Tuesday, criticised the International Monetary Fund (IMF), accusing it of promoting economic policies that have weakened public spending and increased hardship for citizens.
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Titled Still Cooking with a Failed Recipe: A Review of IMF Country Advice on Social Spending, Public Services, Debt, Tax and Gender Equality, the study reviewed 29 IMF policy documents covering 11 countries, including Nigeria, between February 2022 and February 2025.
Other countries examined in the report include Brazil, Ghana, Kenya, Malawi, Nepal, Senegal, Uganda, the United Kingdom, Zambia and Zimbabwe.
According to the findings, Nigeria allocates 20.1 per cent of its national revenue to servicing external debt, while only 4.06 per cent goes to healthcare and 4.40 per cent to education.
The report noted that seven of the eight African countries assessed spent more on debt servicing than on healthcare, while only Ghana and Zimbabwe allocated more resources to education than debt repayment.
ActionAid argued that rising debt obligations have become the biggest barrier preventing many low-income countries from investing adequately in public services.
The organisation also criticised the IMF for failing to assess how debt repayments affect funding for critical sectors such as health and education, despite the growing financial burden on developing nations.
According to the report, IMF policy advice largely treats debt repayment as unavoidable, leaving governments to finance social services only after meeting obligations to creditors.
On Nigeria’s fuel subsidy removal, the report stated that although the IMF recommended the policy, it acknowledged that measures introduced to cushion its impact on vulnerable citizens were insufficient and implemented too slowly.
ActionAid said the resulting cost-of-living crisis eventually forced the government to introduce fresh relief measures to ease pressure on households.
The report further claimed that the IMF’s recommendations to Nigeria have changed little despite repeated commitments to support social spending and gender equality.
It noted that Nigeria’s public sector wage bill has remained fixed at 1.9 per cent of Gross Domestic Product for six consecutive years, significantly below the African average of 7.6 per cent and the global average of nine per cent.
Despite the low spending, ActionAid said the IMF did not recommend increasing funding for public sector workers such as teachers, nurses and doctors.
The report contrasted Nigeria’s situation with that of the United Kingdom, where public sector wages account for 15.9 per cent of GDP and where the IMF has encouraged additional public investment.
ActionAid Nigeria Country Director, Andrew Mamedu, criticised what he described as inconsistent policy recommendations, arguing that Nigerians are bearing the burden of higher taxes and subsidy reforms without corresponding investments in essential public services.
The report also disclosed that the IMF advised Nigeria to increase Value Added Tax from 7.5 per cent to 15 per cent by 2026 and raise excise duties on tobacco and alcohol.
ActionAid argued that such tax measures disproportionately affect low-income earners while placing little additional burden on the country’s wealthiest citizens.
The organisation concluded by urging a fundamental rethink of the IMF’s approach to debt management.
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