Nigeria’s debt servicing obligations remained heavy in the first nine months of 2025, with fresh figures showing the Federal Government spent a large share of its earnings on loan repayments.
According to the 2025 Third Quarter Budget Implementation Report, debt servicing between January and September stood at N12.52 trillion, representing more than 67 per cent of total retained revenue within the period.
The figures indicate that over N67 out of every N100 earned by the government was used to settle existing debt commitments, further tightening pressure on public finances.
The report showed debt service remained one of the government’s biggest expenditure items, limiting its fiscal room. Of the total amount, domestic debt service accounted for N6.32 trillion, while external debt repayments stood at N4.93 trillion. In the third quarter alone, debt servicing reached N3.41 trillion.
Compared with the Federation Account Allocation Committee net distributable revenue of N10.29 trillion in Q3, debt servicing consumed more than 33 per cent.
Government revenue performance also fell below expectations during the period, largely due to weaker oil earnings. Total revenue between January and September was put at N18.63 trillion, far below the prorated target of N30.67 trillion, leaving a shortfall of N12.04 trillion.
Oil revenue in Q3 contributed N2.45 trillion, missing projections by over 53 per cent, while customs revenue also recorded a significant deficit. Average crude oil production stood at 1.64 million barrels per day against the benchmark of 2.12 million barrels, while average oil price settled at $68.50 per barrel, below the projected $75 benchmark.
The Budget Office of the Federation attributed the weak oil performance to crude theft, pipeline vandalism, production disruptions and declining global crude prices.
Despite this, non-oil revenue provided some relief, contributing N5.25 trillion in Q3, or 68 per cent of total revenue. Company Income Tax, Value Added Tax and Electronic Money Transfer Levy collections all surpassed projections during the quarter.
Total government spending in Q3 stood at N8.03 trillion, below the projected N13.75 trillion, while the fiscal deficit was recorded at N328.57 billion. Analysts warned that rising debt servicing costs continue to reduce available funding for infrastructure, healthcare, education and other development projects.
Nigeria’s total public debt stock rose to N153.29 trillion as of September 2025, with domestic debt making up 53.37 per cent and external debt accounting for 46.63 per cent. The Budget Office maintained that the country’s major fiscal challenge remains weak revenue generation rather than debt sustainability alone.
