Nigeria’s total debt servicing bill rose sharply to ₦13.12 trillion in 2024, marking a 68% increase from ₦7.8 trillion in the previous year, according to new figures from the Debt Management Office (DMO).
The figure overshot the budgeted allocation of ₦12.3 trillion for the year, underscoring the growing fiscal strain posed by rising domestic and external borrowing costs. The 2025 budget has already earmarked ₦16 trillion for debt servicing, highlighting the government’s expectation of sustained debt pressure.
Data from the DMO reveals that Nigeria spent ₦5.97 trillion on domestic debt service, a 14.15% rise from ₦5.23 trillion in 2023, while external debt servicing costs surged to $4.66 billion—equivalent to ₦7.15 trillion at the prevailing exchange rate—up by a staggering 167% from ₦2.57 trillion the previous year.
The surge in external debt costs has been attributed to higher global interest rates and the naira’s depreciation, which increased the cost of servicing dollar-denominated loans. Domestically, the rise is linked to increased borrowing and elevated interest rates.
Federal Government Bonds accounted for the lion’s share of domestic servicing, with ₦4.69 trillion paid out in 2024—up from ₦3.66 trillion in 2023. This confirms the government’s continued reliance on long-term debt instruments.
Other domestic instruments included Treasury Bills at ₦747.15 billion (up 129% from ₦326.12 billion), Federal Government Savings Bonds (₦6.38 billion), and FGN SUKUK Bonds (₦158.43 billion). Green Bonds debt service remained steady at ₦2.18 billion.
Meanwhile, the external debt service bill of $4.66 billion in 2024 represented a 33% year-on-year rise from $3.5 billion in 2023. Commercial creditors received the most at $1.47 billion, primarily through Eurobond payments totaling $1.15 billion.
Multilateral creditors followed with $2.62 billion, led by the International Monetary Fund (IMF) at $1.63 billion and the World Bank’s International Development Association at $663.23 million. Bilateral payments stood at $570.67 million, with the Exim Bank of China receiving $362.6 million.
While Vice President Kashim Shettima recently stated that government borrowing had reduced compared to previous years, the soaring debt servicing figures paint a contrasting picture—raising further concerns about Nigeria’s fiscal sustainability.
The rising debt burden has intensified scrutiny over the country’s borrowing strategy, with calls growing for more prudent financial management and transparency in public debt utilisation.
