On Monday, March 9, 2026, Nigerian newspapers carried a report arising from a media brief by the Federal Ministry of Finance that Nigeria spent ₦27.2tn servicing public debt between 2024 and 2025, exceeding capital expenditure by ₦3.9tn.
The report showed debt servicing rose from ₦12.63tn in 2024 to ₦14.57tn in 2025, a 15.4% increase. In both years, actual payments overshot budget projections by a combined ₦5.52tn.
The Finance Ministry officials explained that the rise was driven mainly by naira depreciation and higher domestic interest rates, rather than fresh 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 rises automatically.
During the years under review, capital spending remained relatively high, with ₦11.59tn in 2024 and ₦11.7tn in 2025. However, project-tied loans from development partners ensured infrastructure projects continued despite limited cash releases.
In the same brief, the Federal Ministry of Finance highlighted reforms, including halting the excessive use of Ways and Means advances from the Central Bank of Nigeria, which had accumulated to ₦30tn under previous governments. These overdrafts have now been securitised and formally recognised within the debt framework.
The Ministry of Finance should be commended for its transparency. Its brief was never intended to indict the Federal Government but to tell Nigerians that the government has nothing to hide, and to highlight the efforts being made by the administration of President Bola Tinubu to move Nigeria towards a more sustainable financing model.
When this administration came into being on May 29, 2023, Nigeria’s total debt stock was $42.5bn in foreign debt and ₦53.13tn in local debt. The official exchange rate at that time was ₦465 to one dollar. Due to the bold decision by Mr. President to discontinue the multiple exchange rate regime, the naira underwent a significant adjustment, at one point reaching ₦1,600 to the dollar. The rate has since stabilised and is showing signs of gradual recovery against major currencies.
It is therefore a given that Nigeria now requires more naira to service foreign debts in light of the exchange rate realignment. This is precisely the premise on which the Federal Ministry of Finance’s media brief is based.
Yes, it is true that debt servicing exceeded capital expenditure in the last two years, but this is a transitional dynamic, not a structural verdict. The implementation of capital expenditure in the 2024 and 2025 national budgets has been carried over into the 2026 fiscal year, meaning the full weight of those investments will be captured in the period ahead.
Furthermore, the more revealing metric is not the absolute level of debt servicing but the interest-to-revenue ratio. As Nigeria’s revenue base grows driven by tax reforms, the new fiscal framework, and the recent signing of Executive Order 9 relating to the oil and gas sector, that ratio is materially improving. 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 servicing itself is an obligation that nations must meet to remain creditworthy. 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 emerging from these figures is not one of fiscal issue but of structural transition from a financing model built on short-term, high-cost instruments to one anchored on long-tenor capital tied to productive investment. The cost of the past is being paid. The architecture of a more sustainable future is being built.
*Mustapha Isah,
Former President of the Nigerian Guild of Editors (NGE)
