Domestic Debt Servicing Gulps N19tn In Three Years

…Local Debt Rises By 262%, Servicing By 96% In Two Years

The Federal Government spent N18.86tn to service its domestic debts between 2023 and 2025, according to analysis conducted by THE WHISTLER.

Data obtained from the Debt Management Office showed that the Federal Government spent a total of N4.38tn to service its domestic debt in 2023.

The following year, the domestic debt spends rose to N5.87tn, showing an increase of 34.02 per cent within a period of 12 months.

By the end of 2025, the Federal Government spent a total of N8.61tn on domestic debt servicing. This reflects an increase of 46.68 per cent over the 2024 debt servicing expenses.

Thus, between 2023 and 2025 the cost of the Federal Government domestic debt servicing rose by N4.23tn, reflecting an increase of 96.57 per cent within a period of two years.

The data show a rapid escalation in Nigeria’s domestic debt servicing obligations between 2023 and 2025 as a result of increased total domestic debt burden.

As of January 1, 2023, the domestic debt of the Federal Government stood at N22.21tn made up of N16.42tn FGN Bonds; N4.42tn Nigerian Treasury Bills; N50.99bn Nigerian Treasury Bonds; N27.51 FGN Savings Bond; 742.56bn FGN Sukuk; N15bn Green Bond; and N530bn Promissory Notes.

By December 31, 2024, the Federal Government’s domestic debt had risen to N70.41tn comprising N55,44tn FGN Bonds; 12.35tn Nigerian Treasury Bills; N992.56bn FGN Sukuk; N72.87bn FGN Savings Bond; N15bn Green Bond; and N1.54tn Promissory Notes.

As of December 31, 2025, the Federal Government domestic debt stock had risen to N80.49tn, comprising N63.63tn FGN Bonds; N13.85tn Nigerian Treasury Bills; N1.19 FGN Sukuk Bonds; N104.32bn FGN Savings Bonds; N62.36 FGN Green Bonds; N1.54tn Promissory Notes; and N100bn Unclaimed Funds Trust Fund FGN Security.

Thus, the domestic burden of the Federal Government rose from N22.21tn to N80.49tn between 2023 and 2025, showing an increase of N58.28tn or 262.4 per cent within a period of three years.

As a result of the increased local debt stock, total domestic debt servicing expenses increased sharply, from N4.38tn to N8.61tn in two years.

One of the items that increased the domestic debt burden of the Federal Government was the securitisation of the N22.72tn Ways and Means the Central Bank of Nigeria advanced to the government under the late Muhammadu Buhari.

Federal Government Bonds remained the dominant debt instrument throughout the three years, accounting for the largest share of debt servicing, although their share declined from 83.6 per cent in 2023 to 63.8 per cent in 2025.

Treasury Bills recorded the fastest growth, rising from N326bn in 2023 to N2.55tn in 2025, suggesting increased reliance on short-term domestic borrowing.

Promissory Notes consistently represented about four to five per cent of annual debt service.

Sukuk, Green Bonds and FGN Savings Bonds remained relatively small components of the domestic debt portfolio.

While Federal Government Bonds continued to dominate the local debt liabilities, the surge in Treasury Bills indicates a growing dependence on short-term financing.

The near doubling of total domestic debt service over the period suggests increasing fiscal pressure, with debt service consuming a much larger share of government resources than in previous years.

A breakdown of the debt servicing obligations for the three years under review shows that the interest on Nigerian Treasury Bills rose from N326.12bn in 2023 to N747.15bn in 2024 before rising to N2.55tn in 2025.

The servicing of FGN Bonds rose from N3.66tn in 2023. In 2024, it rose to N4.69tn before it peaked at N5.49tn in 2025.

On the other hand, N57.36bn was spent on servicing Treasury Bonds in 2023. Nothing was spent on this instrument in the subsequent years.

In 2023, the sum of N2.18bn was spent on servicing Green Bonds. The same amount was spent on the instrument in 2024. However, by 2025, the spending on the instrument rose to N6.67bn.

Green Bonds are specialised debt instruments which enables the Federal Government to borrow for the funding of environmentally sustainable projects such as renewable energy and clean transportation.

On Sukuk Bond, N103.25bn was spent in 2023. The spending on this Islamic financing instrument rose to N158.43bn in 2024. It rose again to N171.73bn the following year, 2025.