FG Spent 47% Of Budget On Debt Servicing In 2024

• Debt servicing consumed 47% of Nigeria’s budget in 2024.
• Federal Government’s debt payments surpassed revenue by 147%.
• Rising debt hinders infrastructure investment and economic growth potential.

Debt servicing consumed 47% of the Federal Government’s expenditure in the first nine months of 2024, according to Central Bank of Nigeria data.

The government spent ₦8.94tn on debt repayments during this period, marking a 56.8% increase from ₦5.69tn in 2023.

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EKO HOT BLOG reports that this expenditure accounted for nearly half of the ₦18.97tn total budget, compared to 42% in the corresponding period of 2023.

The debt-to-revenue ratio highlights the challenge. In 2024, debt servicing consumed 147% of the ₦6.08tn revenue, worsening from 132% of ₦4.32tn revenue in 2023. Analysts warn this trend indicates reliance on borrowing to fund expenditure, including debt repayment, which threatens fiscal sustainability.

Recurrent expenditure, including salaries and debt payments, surged 45.6% from ₦10.38tn in 2023 to ₦15.11tn in 2024. Meanwhile, capital expenditure grew modestly by 20.8%, from ₦3.19tn in 2023 to ₦3.86tn in 2024. The disproportionate focus on recurrent costs exacerbates Nigeria’s infrastructure deficit and economic stagnation.

Despite these challenges, President Bola Tinubu claimed a reduction in the debt service-to-revenue ratio from 97% to 68% during his administration. However, CBN data contradicts this, showing the ratio worsened to 147% by late 2024. Analysts, including Prof. Adeola Adenikinju, have criticized the unsustainable fiscal path, noting debt servicing offers no direct benefits to the economy.

Global credit agency Fitch forecasts Nigeria’s external debt servicing will rise by $400m to $5.2bn in 2025. Experts, including the IMF, emphasize the need for robust revenue mobilization to ease fiscal pressure. Davide Furceri of the IMF urged Nigeria to expand its tax base and enhance transparency in revenue collection.

Tinubu has also called for global debt forgiveness for developing nations, underscoring the urgent need for international fiscal support to alleviate Nigeria’s debt crisis.

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