Nigeria allocated $817.4 million (approximately N1.26 trillion) for debt servicing in January and February 2025, reflecting a 3.12 percent decrease from the $843.73 million spent in the same period of 2024.
Thank you for reading this post, don't forget to subscribe!According to the Central Bank of Nigeria’s (CBN) International Payments Report, the federal government spent $540.7 million on debt servicing in January and $276.7 million in February.
In 2024, the country spent a total of $3.81 billion (N5.9 trillion) on debt repayments.
Record-Breaking Budget and Rising Debt Costs
The decline in debt servicing costs comes as the federal government unveils its largest national budget in 65 years, proposing a N54.99 trillion spending plan for 2025—representing a 56.89 percent increase from the N35.05 trillion budgeted in 2024, including supplementary allocations.
President Bola Tinubu labeled the spending plan the “Budget of Restoration,” aimed at stabilizing the economy and fostering growth.
Debt servicing remains a major component of government spending, with N16.3 trillion allocated in the 2025 budget—marking a staggering 95 percent increase from the N8.25 trillion set aside in 2024.
Decline in Foreign Trade Payments
Meanwhile, Nigeria’s foreign trade through Letters of Credit (LC) payments, a key measure of the country’s creditworthiness and import trade volume, recorded a slight 0.55 percent year-on-year drop, totaling $160 million in the first two months of 2025 compared to $160.9 million in the same period last year.
For the full year of 2024, LC payments stood at $801.06 million, marking a 39 percent decline from the $1.32 billion recorded in 2023.
The figures highlight the federal government’s growing fiscal challenges as it balances rising expenditures with declining foreign trade financing.
