Nigeria spends nearly five times more of its national revenue on servicing external debt than it allocates to healthcare and education combined, according to a new report released by ActionAid International and ActionAid Nigeria.
The report, published on Tuesday, also criticised the International Monetary Fund (IMF), accusing the global financial institution of promoting policies that have weakened social spending and increased economic hardship in developing countries.
Titled “Still Cooking with a Failed Recipe: A Review of IMF Country Advice on Social Spending, Public Services, Debt, Tax and Gender Equality,” the report reviewed 29 IMF documents across 11 countries between February 2022 and February 2025.
The countries examined include Nigeria, Ghana, Kenya, Malawi, Zambia, Zimbabwe, Senegal, Uganda, Brazil, Nepal and the United Kingdom.
According to the report, Nigeria currently allocates 20.1 per cent of its national revenue to external debt servicing, compared to 4.06 per cent for healthcare and 4.40 per cent for education.
ActionAid said the figures highlight the significant burden debt obligations place on public finances and social investments.
The report noted that seven of the eight African countries studied spent more on debt servicing than on healthcare, while six spent more than twice as much on debt repayments as on health services.
It further observed that only Ghana and Zimbabwe allocated more funding to education than to debt servicing.
“The scale of the debt burden relative to social spending is stark,” the report stated.
According to ActionAid, debt servicing has become one of the greatest obstacles preventing lower-income countries from expanding public services and improving social welfare.
The organisation argued that the IMF failed to adequately address the relationship between debt repayments and reduced spending on essential sectors such as healthcare and education.
It stated that none of the IMF documents reviewed compared debt servicing costs with spending on health or education, despite debt repayments exceeding healthcare expenditures in most of the African countries examined.
ActionAid further claimed that debt obligations were treated as unavoidable commitments, with governments expected to prioritise creditor payments before allocating resources to social programmes.
The report also revisited Nigeria’s fuel subsidy reforms, noting that the IMF had supported the removal of fuel subsidies while acknowledging that government measures aimed at cushioning the impact on vulnerable households were insufficient.
According to the report, the IMF recommended the removal of Nigeria’s fuel subsidy but noted that compensatory measures for poor households were not expanded quickly enough to offset the economic impact.
ActionAid argued that the resulting cost-of-living pressures eventually forced the government to reintroduce support measures to ease the burden on citizens.
The report further alleged that IMF policy recommendations for Nigeria have remained largely unchanged despite the institution’s public commitments to social spending, poverty reduction and gender equality.
It highlighted that Nigeria’s public-sector wage bill has remained at 1.9 per cent of Gross Domestic Product (GDP) for six consecutive years, making it the lowest among the 11 countries reviewed.
According to the report, the figure is significantly below the African average of 7.6 per cent and the global average of nine per cent.
Despite the low wage bill, ActionAid said the IMF did not recommend increased spending on public-sector workers such as teachers, healthcare professionals and other essential service providers.
The report contrasted Nigeria’s situation with that of the United Kingdom, where public-sector wage spending accounts for 15.9 per cent of GDP and where the IMF has encouraged further public investment.
Commenting on the findings, ActionAid Nigeria Country Director, Andrew Mamedu, accused the IMF of applying double standards in its policy recommendations.
“For six years running, the IMF has looked at a wage bill that funds Nigeria’s teachers, nurses and doctors at less than a quarter of the regional average and found nothing to recommend beyond keeping it frozen,” he said.
Mamedu also criticised the economic burden placed on citizens through tax increases and subsidy reforms.
The report disclosed that the IMF advised Nigeria to increase its Value Added Tax (VAT) rate from 7.5 per cent to 15 per cent by 2026 and recommended higher excise duties on tobacco and alcohol products.
ActionAid argued that such measures are regressive because they place a greater financial burden on low-income households without imposing equivalent tax obligations on wealthier individuals.
The organisation concluded that the IMF remains central to the management of debt crises across developing economies but questioned whether its policy framework adequately addresses social welfare and economic inequality.
According to the report, meaningful reforms are needed to ensure that economic policies support investments in healthcare, education and public services while reducing the financial pressures associated with debt servicing.
The findings add to ongoing debates about debt sustainability, fiscal reforms and the balance between economic stability and social development in Nigeria and other developing countries.
