The Federal Government spent a total of N5.97 trillion on domestic debt service in 2024, latest data released by the Debt Management Office (DMO) shows. The amount is N1.59 trillion or 36.26 per cent higher than the N4.38 trillion that the government spent on servicing domestic debts in 2023.
An analysis of the actual domestic debt service data for January – December, 2024, released by the DMO over the weekend, indicates that Federal Government bond interest payments amounted to N4.69 trillion in last year, compared with N3.66 trillion in 2023.
Interest payments on Nigerian Treasury Bills (NTBs) also increased significantly, rising by 129.10 per cent, or N421.03 billion, to N747.15 billion in 2024 compared with N326.12 billion in the preceding year.
Similarly, interest payments on FGN Savings bond rose by 122.75 per cent, or N3.52 billion, to N6.38 billion last year compared with N2.87 billion in 2023. Other highlights of the data are that payments on FGN Sukuk bonds totaled N258.42 billion while interest payment on FG Green bond stood at N2.18 billion.
New Telegraph reports that financial experts had predicted that the devaluation of the naira, occasioned by the forex reforms introduced by the Central Bank of Nigeria (CBN) in June 2023, as well as the apex bank’s monetary tightening policy, which saw it raising the Monetary Policy Rate (MPR) by 875 basis points to 27.5 per cent in 2024, would lead to an increase in the country’s public debt and the cost of servicing the debt.
In fact, the latest DMO data shows that Nigeria’s total public debt stockcomprising external and domestic debt of the FGN, States and FCT, rose to N144.67 trillion ($94.23 billion) as of December 31, 2024, representing a 48.58 per cent increase compared with N97.34 trillion ($108.23 billion) recorded at the end of December 2023.
A breakdown of the data indicates that domestic debt rose by 25.77 per cent from N59.12 trillion ($65.73 billion) at the end of December 2023 to N74.38 trillion ($48.44 billion) in December 2024.
While the Federal Government’s domestic debt component grew significantly from N53.26 trillion at the end of 2023 to N70.41 trillion at the end of December last year, reflecting a 32.19 per cent increase, the domestic debt owed by states and the Federal Capital Territory dropped from N5.86 trillion to N3.97 trillion, representing a decline of 32.27 per cent.
Further analysis of the data shows that the country’s external debt increased by 83.89 per cent from N38.22 trillion ($42.50 billion) in December 2023 to N70.29 trillion ($45.78 billion) in December 2024.
In his firm’s “Nigeria 2025 economic forecast,” the Chief Executive Officer (CEO) of CFG Advisory, Mr. Tilewa Adebajo, expressed concern over Nigeria’s rising debt servicing costs, which, according to him, were being paid for by the funds that the Federal Government saved from removing the subsidy on petrol.
He contended that the country’s debt servicing cost, which doubled from N8 trillion in 2024 to N16.3 trillion in the 2025 proposed budget, “is not sustainable as it exceeds the defence, security, infrastructure, education, and health budgets combined at N14 trillion.”
Adebajo stated: “Nigeria’s 18-month economic reform program has yielded mixed results, largely due to poor implementation and putting the cart before the horse. The program’s biggest impact on the economy has been the devaluation of the naira from about N450-1700/ US$.
