Nigeria’s debt service burden is projected to rise significantly over the coming years, with debt servicing expected to consume 71.7 per cent of government revenue by 2030, raising fresh concerns about the sustainability of the country’s fiscal position.
The projection is contained in the Debt Management Office’s (DMO) 2024 Debt Sustainability Analysis report released on Monday.
The report warned that although Nigeria’s debt-to-GDP ratio is expected to decline over the projection period, the proportion of government revenue required to service outstanding obligations could increase substantially.
According to the DMO, the debt service-to-revenue ratio is projected to decline from 60.6 per cent in 2024 to 44.9 per cent in 2025 before rising to 51 per cent in 2026.
The ratio is subsequently expected to climb to 71.7 per cent by 2030, significantly exceeding the 50 per cent threshold recommended by the debt management agency.
The projection highlights the growing pressure of debt obligations on government finances, particularly as the Federal Government continues to contend with competing demands for infrastructure investment, social spending and economic development.
Nigeria’s domestic debt servicing expenditure has already shown significant growth, with the Federal Government spending N8.61 trillion in 2025.
The pressure continued in the first half of 2026, when domestic debt service expenditure reached N5.28 trillion, representing about 61.4 per cent of the full-year 2025 expenditure.
The figures underscore the increasing cost of domestic borrowing and the challenge of generating sufficient government revenue to meet debt obligations without significantly reducing funds available for other public expenditure.
The country’s public debt is also expected to exceed N200 trillion by the end of 2026, further intensifying concerns about the relationship between borrowing, revenue generation and fiscal sustainability.
Analysts have consistently identified Nigeria’s weak revenue base as a major vulnerability in its debt management framework, arguing that the country’s ability to service its obligations depends not only on the size of its debt stock but also on its capacity to generate sustainable revenues.
The latest DMO projections reinforce the need for stronger revenue mobilisation, improved expenditure management and more productive deployment of borrowed funds.
For Nigeria, reducing the debt service burden will require sustained fiscal reforms and economic policies capable of expanding government revenues while limiting the accumulation of expensive debt.
