The Federal Government devoted nearly three-quarters of its total revenue to debt servicing in the first seven months of 2025, highlighting the growing pressure Nigeria’s debt obligations are placing on public finances.
An analysis of the 2026–2028 Medium-Term Expenditure Framework and Fiscal Strategy Paper (MTEF/FSP) released by the Budget Office of the Federation shows that between January and July 2025, the Federal Government generated total revenue of N13.67tn.
Within the same period, N9.81tn was spent on servicing domestic and external debts, indicating that 71.8 per cent of total revenue was absorbed by debt service alone.
The fiscal strain becomes more severe when personnel costs across ministries, departments and agencies, as well as government-owned enterprises, are taken into account. Personnel expenditure during the period stood at N4.51tn.
Combined spending on debt servicing and personnel costs therefore rose to N14.32tn, exceeding total revenue for the seven-month period. This implies that debt service and salaries alone accounted for about 105 per cent of Federal Government income between January and July 2025.
Data from the Budget Office shows that the widening revenue gap was driven largely by a sharp decline in oil earnings, which remain a major source of government income despite ongoing diversification efforts.
The figures underscore concerns about fiscal sustainability, as rising debt service obligations continue to limit the government’s capacity to fund capital projects and social spending.
