Nigeria is facing a daunting financial challenge, with its debt reaching an all-time high of N77 trillion as of 2022, and its debt-to-GDP ratio more than doubling from 17.7% to 37.3%.
The government plans to spend a staggering N50.2 trillion on debt servicing between 2025 and 2027. This breaks down to N15.3 trillion in 2025, N15.5 trillion in 2026, and N19.4 trillion in 2027.
The allocated amount for debt servicing surpasses the amount allocated for capital expenditures, which are crucial for infrastructure development.
In 2025, capital expenditure is expected to be N16.4 trillion, while in 2026 and 2027, it’s expected to be N15.9 trillion and N16.5 trillion, respectively.
Nigeria’s reliance on loans to augment its revenue has led to a significant increase in debt servicing costs. This trend is expected to continue, with debt servicing accounting for 34.06% of total annual expenditures between 2025 and 2027.
Experts warn that this could hinder Nigeria’s development goals and exacerbate challenges in key sectors such as health, water, and education.
The country’s total debt may hit N170 trillion by 2027, with the government planning to borrow an additional N31.24 trillion over the next three years. This borrowing trend raises concerns about Nigeria’s debt-to-revenue ratio and fiscal sustainability.
