The Federal Government spent N12.63tn on debt-related obligations between January and September 2025, exceeding the budgeted N10.74trn by N1.90trn, according to the Budget Office’s third-quarter Budget Implementation Report.
Debt servicing alone accounted for N12.52tn, surpassing its allocation by N2.07trn.
Domestic debt service stood at N6.23trn, while foreign debt service reached N6.30trn.
The report showed that debt payments consumed about 67 per cent of the Federal Government’s retained revenue of N18.63trn during the period, leaving limited resources for other obligations.
Revenue performance also fell below expectations, with actual collections of N18.63trn against a projected N30.67trn, representing a shortfall of N12.03trn or 39.24 per cent.
Meanwhile, capital expenditure stood at just N3.10trn, far below the N17.58trn budgeted for the first nine months of the year, meaning debt-related payments were more than four times spending on infrastructure and other capital projects.
The Budget Office warned that the high debt service-to-revenue ratio continued to constrain fiscal space, highlighting the need for stronger revenue mobilisation and expenditure reforms.
Amid the pressure, Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Taiwo Oyedele, said the government was considering refinancing expensive debts and exploring additional funding sources to bridge its budget deficit.
Economists, including Aliyu Ilias and Muda Yusuf, urged the government to boost revenue, reduce borrowing costs, sell non-core assets and expand public-private partnerships to ease the growing debt burden.
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