Nigeria’s Debt Service Burden Projected to Surpass N91 Trillion Under Tinubu Administration
An analysis of Nigeria’s fiscal trajectory indicates that the Federal Government, under President Bola Tinubu, is projected to allocate over N91 trillion to debt servicing between 2023 and 2028. This substantial figure, derived from budgetary provisions and forward estimates, underscores the escalating cost of public borrowing against a backdrop of constrained revenue generation. The mounting obligations threaten to crowd out essential public investment, challenging efforts to return normalcy to insecure and underdeveloped regions through capital projects.
Fiscal Pressures and the Strain on Capital Expenditure
The scale of projected debt service is a direct consequence of rising fiscal deficits, a rapidly expanding debt stock, and elevated interest rates. While the government has outlined plans to spend N114.8 trillion on capital expenditure over the same six-year period, actual disbursements for infrastructure have consistently lagged behind debt payments. This dynamic places critical development initiatives at risk, as debt obligations take precedence. The situation suggests that capital projects, vital for long-term economic growth, are bearing the brunt of acute fiscal pressure.
Root Causes: Revenue Shortfalls and Borrowing Costs
At its core, Nigeria’s rising debt service burden is linked to weak and volatile government revenues, which have consistently failed to match expenditure ambitions. This trend risks culminating in a dangerously high debt service-to-revenue ratio, a key indicator of fiscal stress. Furthermore, the cost of servicing debt is being amplified not only by the sheer size of the debt but also by elevated borrowing costs. This financial environment can indirectly affect broader economic activity, including the flow of private sector credit, as government borrowing competes for available capital.
Unless comprehensive revenue reforms yield sustained gains or borrowing costs decline meaningfully, debt service is likely to remain the single largest claim on public finances. This persistent fiscal reality limits the government’s capacity to invest in transformative sectors such as infrastructure, healthcare, and education, ultimately constraining the nation’s productive potential. The focus on managing this debt, even as lawmakers like Akpabio head supreme legislative committees, will be paramount in navigating the nation’s economic challenges, much as citizens plan for yuletide road travel amidst economic constraints.
