Some Nigerians have expressed concerns over rising cost of servicing debt as against revenue coming into the coffers of the federal government
The development which has a direct effect on rising debt profile of the country is causing disquiet among some Nigerians.
Specifically, the Federal Government spent N8.94 trillion on debt servicing in the first nine months of 2024, accounting for 47% of total expenditure during the period under review, representing 56.8% increase from the N5.69 trillion spent in the same period of 2023.
This is according to a peep into the data from the quarterly statistical bulletin of the Central Bank of Nigeria (CBN).
Metrobusinessnews.com (MBN) checks show that president Tinubu inherited a disturbing scenario where almost all the revenue accruing to the federation account was going for debt servicing.
Consequently, worried by the trend, president had during the country’s 64th Independence Anniversary broadcast, stated that his administration has reduced the debt service-to-revenue ratio from 97% to 68%.
He emphasized the need to end the cycle of borrowing to finance public spending and stressed that the country could not sustain a situation where over 90% of revenue was spent on debt servicing.
But, the CBN’s latest data contradicts this claim, as the debt service ratio had worsened to 147% in 2024.
Friday Ameh, Lagos based analyst, like most analysts who spoke with MBN expressed concerns over the fiscal regime of Tinubu’s administration.
He described the increase in debt servicing from N8 trillion in 2024 to N16 trillion in 2025 as a ‘worrisome and dangerous development‘.
According to Ameh, the rising cost of debt servicing outweighs critical national spending, including allocations to other critical sectors like education, security, defence, among others, combined, calling on the government to restructure its financial commitments and adopt asset sales as one of the strategies to ease the debt burden.
He advised sale of other national assets that are either moribund or wasting away to raise funds for the country rather than resorting to borrowing, an unwholesome action deplored by the president, with a promise of complete reversal.
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According to another concerned Nigerian,the trend raises critical questions on the country’s fiscal sustainability
According to CBN the debt-to-revenue ratio rose significantly, with debt servicing consuming 147% of retained revenue in the first nine months of 2024, against 132 percent within the same period of 2023.
The stakeholders were unanimous in their submissions that the trend indicates FG’s penchant for borrowing not only for budgetary operations but also for servicing existing debts.
