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On Monday, March 9, 2026, Nigerian newspapers published a report stemming from a Federal Ministry of Finance media report that Nigeria spent ₦27.2 trillion on public debt servicing between 2024 and 2025, exceeding capital expenditure by ₦3.9 trillion.
The report shows that debt service rose from ₦12.63 trillion in 2024 to ₦14.57 trillion in 2025, an increase of 15.4%. In both years, actual payments exceeded budget projections by a total of ₦5.52 trillion.
Ministry of Finance officials explained that the increase was mainly driven by the depreciation of the naira and rising domestic interest rates, rather than new borrowing.
It is a known fact that external debt is denominated in foreign currency. When the naira depreciates, the naira cost of servicing the same dollar debt automatically increases.
During the years under review, capital spending remained relatively high, at ₦11.59 trillion in 2024 and ₦11.7 trillion in 2025. However, project-tied lending by development partners ensured that infrastructure projects continued despite limited liquidity releases.
In the same mandate, the Federal Ministry of Finance highlighted reforms, including halting the excessive use of the Central Bank of Nigeria’s Ways and Means advances, which had accumulated to ₦30 trillion under previous governments. These overdrafts have now been securitized and formally recognized in the debt framework.
The Ministry of Finance should be commended for its transparency. His mission has never been to indict the federal government, but to tell Nigerians that the government has nothing to hide and to highlight the efforts made by President Bola Tinubu’s administration to move Nigeria towards a more sustainable financing model.
When this administration was established on May 29, 2023, Nigeria’s total debt stock was ₦42.5 billion in external debt and ₦53.13 trillion in local debt. The official exchange rate at that time was ₦465 to one dollar.
Due to the President’s bold decision to discontinue the multiple exchange rate regime, the naira underwent a significant adjustment, reaching at one point ₦1,600 to the dollar. The rate has since stabilized and is showing signs of gradual recovery against the major currencies.
It is therefore a fact that Nigeria now requires more naira to service external debt in light of the exchange rate realignment. This is precisely the premise on which the press release from the Federal Ministry of Finance is based.
Yes, it is true that debt service has outpaced capital spending over the past two years, but this is a transitory dynamic, not a structural verdict. The implementation of capital expenditure in the 2024 and 2025 national budgets has been carried over to the 2026 fiscal year, meaning that the full burden of such investments will be captured in the period ahead.
Furthermore, the most revealing parameter is not the absolute level of debt service, but the interest/revenue ratio. As Nigeria’s revenue base grows thanks to tax reforms, the new fiscal framework and the recent signing of Executive Order 9 relating to the oil and gas sector, this ratio is improving substantially. This is what sophisticated investors and credit agencies monitor most closely, and the trajectory is moving in the right direction.
On the other hand, debt service itself is an obligation that nations must meet to remain solvent. Nigeria is meeting its foreign obligations and the trajectory is stabilising. There is a steady and growing flow of foreign exchange into the country, largely as a result of the bold economic reforms carried out by President Bola Tinubu.
Ultimately, the story that emerges from these figures is not about a fiscal issue but about a structural transition from a financing model built on short-term, high-cost instruments to one anchored on long-term capital linked to productive investments. The cost of the past is paid. The architecture of a more sustainable future is being built.
Mustapha Isah is a former president of the Nigerian Publishers Guild
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