The Debt Management Office (DMO) and President Bola Ahmed Tinubu are facing renewed scrutiny over Nigeria’s debt servicing burden in Abuja on Monday, 10 August 2026, after DMO data showed that the Federal Government spent N3.14 trillion servicing domestic debt during the first quarter of the year.

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The figure represents a substantial fiscal obligation at a time when the government is also seeking to increase revenue, fund infrastructure and maintain economic reforms.

Of the N3.14 trillion spent between January and March, N2.97 trillion went towards interest payments, while N169.68 billion was used for principal repayments.

Interest therefore accounted for about 94.6 per cent of the quarter’s domestic debt service, highlighting how heavily the cost of borrowing weighed on government finances.

The monthly figures also reveal a sharp acceleration during the quarter.

Domestic debt service stood at N741.82 billion in January before rising to N967.67 billion in February. By March, the figure had climbed to N1.43 trillion.

March’s payment was 47.7 per cent higher than February’s figure and 92.7 per cent above January’s outlay, making the final month of the quarter responsible for almost half of the total amount recorded between January and March.

Treasury bills and Federal Government bonds accounted for most of the interest burden.

According to the DMO figures, interest on Treasury bills reached about N1 trillion, while interest payments on Federal Government bonds stood at N1.96 trillion.

The government also paid N4.24 billion in interest on FGN savings bonds during the period.

Principal repayments were considerably smaller, with N169.68 billion attributed to repayments on local-denominated promissory notes.

The latest figures come against a wider increase in government borrowing.

Data reported earlier in the year showed that Federal Government domestic borrowing reached about N8.1 trillion in the first quarter of 2026, representing a 7.4 per cent increase from the N7.5 trillion recorded in the corresponding period of 2025.

The combination of fresh borrowing and rising debt-service costs has kept fiscal sustainability firmly in focus.

Proshare noted in its assessment of Nigeria’s Q1 economic position that debt service-to-revenue ratios were approaching 90 per cent, even as the government continued to rely on domestic borrowing to finance its fiscal needs.

Nigeria’s overall public debt also edged up to N159.35 trillion in the first quarter, according to the figures supplied by the DMO report.

President Tinubu has previously acknowledged the scale of the country’s debt obligations.

Speaking at the Africa Forward Summit in Nairobi in May, President Tinubu said Nigeria would spend about US$11.6 billion servicing its debt in 2026, an amount he said was nearly half of projected government revenue.

“Every single dollar that leaves our treasury to pay punitive interest rates is a dollar that did not go into our steel sector, our textile mills, our agro-processing plants, or our digital industries,” Tinubu said.

The President has argued that the high cost of borrowing is partly linked to what he described as an international financial system that treats African countries as persistently high-risk borrowers.

Tinubu has also pointed to the government’s economic reforms, including the removal of fuel subsidies, exchange-rate reforms and changes to the tax system, as measures intended to strengthen public finances and improve investor confidence.

Reuters reported that the President said the reforms had helped stabilise some macroeconomic indicators, although debt costs continued to restrict spending on infrastructure, healthcare and education.

The debt picture is therefore more complicated than the headline figure alone suggests.

Higher debt servicing places pressure on government finances, but borrowing can also support infrastructure and other productive investments when funds are deployed effectively and the resulting economic activity generates sufficient returns.

Nigeria has simultaneously recorded signs of improvement in some revenue areas.

CBN data reported in June showed that non-oil revenue reached N2.40 trillion in February 2026, accounting for 76.57 per cent of total Federation Account revenue for the month.

The CBN attributed the improvement partly to stronger corporate tax and VAT collections.

That revenue performance provides a more positive element to the fiscal story, although it does not remove the pressure created by debt obligations.

For ordinary Nigerians, the significance of the figures lies in what government finances can ultimately deliver.

Every naira committed to servicing existing obligations is a naira that cannot simultaneously be spent on another public priority, although debt repayments are necessary to maintain the government’s credibility with lenders and investors.

The sharp rise recorded in March will therefore be closely watched alongside borrowing levels, revenue collection and the government’s ability to keep the debt burden manageable.

With debt servicing projected to consume a sizeable portion of national revenue in 2026, the challenge for the Tinubu administration is increasingly clear: raise more sustainable revenue, control borrowing costs and ensure that new debt contributes to economic activity capable of supporting future repayments.

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The N3.14 trillion domestic debt-service bill recorded in the first quarter is a stark reminder that Nigeria’s fiscal recovery is being tested not only by how much money government can raise, but by how much of that money is already committed to the past.