Nigeria’s debt burden is increasingly shifting inward, with new data showing a sharp rise in the cost of servicing domestic obligations, placing greater strain on public finances.
According to figures released by the Debt Management Office, total debt servicing increased to N15.81 trillion in 2025, a substantial leap from N12.83 trillion recorded a year earlier. Higher interest on local borrowing, which now makes up more than external debt, mostly accounts for the increase.
Reflecting increased dependency on tools such as treasury bills, domestic debt servicing alone skyrocketed to N8.61 trillion. Interest payments on these short-term borrowings increased sharply, thereby emphasizing growing refinancing pressure. Though their relative proportion has declined as treasury bill liabilities have increased more rapidly, government bonds still represent a significant expense.
The News Chronicle understands that the current trend points to a more severe financial problem, in which debt servicing is absorbing a significant share of government income, thereby restricting room for infrastructure, healthcare, and education expenditures despite continuous reforms.
On the outside, service expenditures increased somewhat, as commercial loans and multilateral organizations continue to account for a sizeable proportion of obligations. But experts point out that the quicker rise in internal debt payments might further restrict budget flexibility.
As borrowing estimates for 2026 are already trending upward, worries about sustainability are increasing since experts warn that poorly controlled, increasing debt charges might still crowd out essential development expenditures.
