Nigeria Spends 69% of 2024 Revenues on Debt Service, Says Budget Office

BY favour momodu
September 21, 2025
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Nigeria’s rising debt burden has once again come under scrutiny as the Federal Government spent 69 per cent of its total revenues in 2024 on debt servicing, according to the latest Budget Implementation Report (BIR) released by the Budget Office of the Federation (BOF).

The report revealed that of the ₦19.354 trillion earned by the government in 2024, a staggering ₦11.887 trillion was dedicated to debt obligations. This left limited fiscal room for critical investments in infrastructure, healthcare, education, and other development priorities.

While the 2024 figure represents a marginal improvement compared to 2023, when debt service consumed 78 per cent of government revenue, analysts warn that the situation remains precarious.

“The World Bank and IMF recommend that debt service should not exceed 30–40 per cent of government revenue for developing economies. Nigeria’s 69 per cent means nearly ₦7 out of every ₦10 earned is used to service debt, leaving very little fiscal space for development spending,” said Prof. Godwin Oyedokun, an Accounting and Financial Development expert at Lead City University, Ibadan.

Observers note that despite efforts to expand revenue through tax reforms and non-oil earnings, Nigeria’s heavy reliance on borrowing continues to pose a threat to fiscal sustainability. With the country still grappling with inflation, foreign exchange volatility, and sluggish economic growth, debt servicing is expected to remain a significant strain on public finances.

Economic experts have urged the government to accelerate diversification of revenue sources, curb recurrent expenditure, and prioritize projects with high returns on investment to ease the debt burden in coming years.

The report underscores the mounting pressure on policymakers ahead of the 2025 fiscal year, as Nigeria confronts the delicate balance between meeting debt obligations and funding development.