Budget 2026: Nigeria to spend ₦15.81 trillion on debt servicing

Nigeria will spend a staggering ₦15.81 trillion on public debt servicing in fiscal 2026, underscoring mounting fiscal pressures in the country’s record budget of ₦68.32 trillion.

The spending plan, recently approved by the National Assembly and signed into law by President Bola Ahmed Tinubu, allocates a significant portion of total spending to debt obligations, raising new concerns about the sustainability of the nation’s public finances.

Analysis by civic tech organization BudgIT revealed that debt service ranks among the largest components of spending, nearly rivaling allocations for capital and recurring spending.

A breakdown of the budget shows that ₦32.29 trillion is earmarked for capital projects, ₦15.43 trillion for recurrent (non-debt-related) expenditure and ₦4.79 trillion for statutory transfers, while debt service alone swallows ₦15.81 trillion.

The federal government projects revenue of ₦36.87 trillion, leaving a deficit of about ₦31.45 trillion. The deficit is expected to be financed mostly through borrowing, with ₦29.20 trillion coming from the domestic market, ₦2.05 trillion from external borrowing and about ₦189 billion from asset sales.

BudgIT, reacting to the figures, called for greater public control over public spending, stressing that the budget represents taxpayers’ money.

“₦68.32 trillion has been proposed. This is public money, our money,” the organization said.

The economic projections underlying the budget include crude oil production of 1.84 million barrels per day, a benchmark oil price of $64.85 per barrel, an exchange rate of ₦1,400 per dollar and a growth rate of 4.28%.

However, analysts warn that rising debt servicing costs continue to erode fiscal space, with obligations consuming a substantial share of government revenues and limiting funds available for critical infrastructure and social investments.

Data from the Debt Management Office indicates that Nigeria’s debt service burden has been on an upward trajectory, driven by rising domestic financing costs and external debt commitments.

Experts warn that unless revenue generation improves significantly, growing reliance on debt could further strain the economy and complicate efforts to achieve sustainable development.

‘

Want to share a story with us? Do you want to advertise with us? Do you need advertising for a product, service or event? Contact us on WhatsApp +2348183319097 Email: platformtimes@gmail.com

We are committed to impactful investigative journalism for human interest and social justice. Your donation will help us tell more stories. Please donate any amount HERE