The Federal Government spent a staggering N8.94 trillion on debt servicing during the first nine months of 2024, representing 47 percent of its total expenditure for the period.
This amount marks a 56.8 percent increase from the N5.69 trillion spent on debt servicing in the same period of 2023.
The data, drawn from the Central Bank of Nigeria’s, CBN, quarterly statistical bulletin, highlights the growing fiscal strain posed by the nation’s debt obligations.
The debt service-to-revenue ratio also worsened significantly, with debt servicing consuming 147 percent of retained revenue in 2024, compared to 132 percent in 2023. The government retained N6.08 trillion in revenue during this period, yet this amount was overshadowed by debt servicing costs, indicating a rising dependence on borrowing for both budgetary operations and existing debt repayment.
Recurrent expenditure saw a sharp rise to N15.11 trillion in the first nine months of 2024, a 45.6 percent increase from N10.38 trillion in the corresponding period of 2023. Personnel costs increased by 20 percent, reaching N3.59 trillion from N2.99 trillion. Overhead costs grew by 51.4 percent to N892.85 billion, up from N589.63 billion. Transfers more than doubled, rising by 83.8 percent to N1.31 trillion compared to N711.36 billion. However, pensions and gratuities declined slightly, falling from N339.66 billion in 2023 to N336.61 billion in 2024.
Capital expenditure also recorded growth, rising by 20.8 percent to N3.86 trillion, compared to N3.19 trillion in 2023. However, the increase in capital spending was modest when compared to the surge in recurrent expenditure, reflecting how rising debt obligations are crowding out critical investments in infrastructure and development.
The fiscal deficit expanded by 39.3 percent, increasing from N9.25 trillion in the first nine months of 2023 to N12.89 trillion in the same period of 2024. This widening gap between revenue and expenditure, compounded by escalating debt servicing costs, raises serious concerns about the government’s fiscal sustainability.
During Nigeria’s 64th Independence Anniversary broadcast, President Bola Tinubu stated that his administration had reduced the debt service-to-revenue ratio from 97 percent to 68 percent, emphasizing the need to end the cycle of borrowing to fund public spending.
He warned that the country could not sustain a situation where 90 percent of revenue is consumed by debt servicing. However, the latest data from the CBN contradicts this claim, showing the debt service ratio has worsened to 147 percent in 2024.
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