By Chinwendu Obienyi
The Federal Government spent a whopping N8.93 trillion (about $6.2 billion) on debt servicing between January and September 2024, representing 61 per cent of the N14.55 trillion revenue generated during the period.
This was contained in the budget implementation report obtained by Daily Sun.
The figure surpassed both quarterly and cumulative targets, highlighting the mounting strain debt obligations are placing on government finances.
According to the report, debt servicing cost N2.26 trillion in the first quarter, N3.77 trillion in the second, and N2.89 trillion in the third. Each outturn exceeded the N2.01 trillion budgeted for servicing per quarter, while the cumulative nine-month expenditure overshot the N6.03 trillion projection for the period by almost 48 per cent.
The surge in debt costs came as government revenues underperformed relative to budget assumptions. The federal government generated N14.55 trillion in the nine months, short of the N19.4 trillion it had expected. On a quarterly basis, receipts totaled N3.58 trillion in the first quarter, N4.88 trillion in the second, and N6.08 trillion in the third. Each quarter fell below the government’s N6.46 trillion revenue target.
The mismatch between revenue and debt obligations underscores Nigeria’s fiscal fragility at a time when Africa’s biggest economy is struggling to contain inflation, currency pressures, and weak oil receipts. Debt servicing already accounts for the largest share of the federal budget, leaving limited fiscal space for infrastructure and social spending.
The report showed a mixed performance across revenue streams. Non-oil revenue exceeded expectations, contributing N3.65 trillion in the nine months against a projection of N2.67 trillion. The amount has already surpassed the N3.56 trillion projected for the full year.
Quarterly non-oil revenues stood at N985.07 billion in the first quarter, N1.30 trillion in the second, and N1.35 trillion in the third. Each figure outperformed the N892.44 billion budgeted per quarter, reflecting improved tax administration and stronger collections from company income tax, value-added tax, and customs duties.
By contrast, oil revenues fell short, underscoring persistent challenges in Nigeria’s key export sector. The government earned N4.63 trillion from oil between January and September, compared with a target of N6.13 trillion. The figure is also significantly below the N8.17 trillion full-year projection.
Quarterly oil revenues were N1.39 trillion in the first quarter, N1.32 trillion in the second, and N1.92 trillion in the third—each underperforming the N2.04 trillion target.
Analysts attribute the shortfall to lower crude oil production, pipeline vandalism, and persistent oil theft that have eroded Nigeria’s capacity to benefit fully from global oil prices.
Nigeria’s rising debt service burden has long been a point of concern for policymakers and investors. The International Monetary Fund (IMF) and World Bank have repeatedly warned that the country’s fiscal position is unsustainable without significant reforms to boost revenue and rein in spending.
With debt servicing consuming more than half of federal revenues, Nigeria faces difficult trade-offs between meeting its obligations and funding critical infrastructure and social programs.
The federal government has sought to raise non-oil revenues through tax reforms and wider adoption of technology in revenue collection. However, the fiscal outlook remains vulnerable to oil market volatility and exchange rate fluctuations.
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