The Federal Government spent N8.94 trillion on debt servicing in the first nine months of 2024, accounting for 47 percent of total expenditure during the period.
The amount represents a 56.8 percent increase from the N5.69 trillion spent in the same period of 2023.
This is according to data from the quarterly statistical bulletin of the Central Bank of Nigeria (CBN).
The rising debt servicing cost highlights the growing burden of Nigeria’s debt obligations which has been a concern amidst widening fiscal deficits.
The debt-to-revenue ratio rose significantly, with debt servicing consuming 147 percent of retained revenue in the first nine months of 2024. This compares unfavorably to 2023, when the ratio stood at 132 percent
The government retained N6.08 trillion in revenue during the period, while debt servicing costs overshadowed this figure. This trend indicates an increasing reliance on borrowing not just for budgetary operations but also for servicing existing debts.
According to the report, recurrent expenditure rose sharply to N15.11 trillion in the first nine months of 2024, up by 45.6 percent from N10.38 trillion in the same period of 2023. Key components of recurrent spending included:
Personnel cost Increased by 20 percent to N3.59 trillion, from N2.99 trillion while overhead cost rose by 51.4 percent to N892.85 billion, from N589.63 billion.
Transfers more than doubled, increasing by 83.8 percent to N1.31 trillion from N711.36 billion.
Pensions and gratuities declined marginally from N339.66 billion in 2023 to N336.61 billion in 2024, while capital expenditure also increased, rising by 20.8 percent to N3.86 trillion, compared to N3.19 trillion in 2023.
However, the growth in capital spending remained modest compared to recurrent expenditure, underscoring how rising debt obligations continue to crowd out critical investments in infrastructure.
The fiscal deficit expanded by 39.3 percent, rising from N9.25 trillion in the first nine months of 2023 to N12.89 trillion in the same period of 2024.
This growing deficit reflects the persistent gap between government revenue and expenditure, compounded by escalating debt servicing costs.
