Federal Government debt repayments exceeded the 2025 budget allocation by N1.90tn in the first nine months of the year, consuming nearly 68 per cent of retained revenue and outstripping capital expenditure by more than four times.
Federal Government debt-related payments rose above budget projections by N1.90tn between January and September 2025, according to fresh data from the Budget Office of the Federation. The 2025 Third Quarter Budget Implementation Report showed that total debt repayments, including domestic debt, foreign debt and sinking fund obligations, reached N12.63tn against a prorated budget provision of N10.74tn, representing an overrun of 17.65 per cent. The report attributed the pressure largely to debt service, which stood at N12.52tn during the period, exceeding its allocation of N10.45tn by N2.07tn. A breakdown showed domestic debt service rose to N6.23tn, surpassing its budget by N832.42bn, while foreign debt service climbed to N6.30tn, exceeding projections by N1.24tn.
The report further revealed that debt servicing accounted for 67.2 per cent of the Federal Government’s retained revenue of N18.63tn in the first nine months of the year. When sinking fund obligations were included, debt-related payments consumed about 67.8 per cent of revenue, meaning that for every N100 earned by the government, approximately N67 was spent on debt obligations. Meanwhile, aggregate revenue underperformed by N12.03tn or 39.24 per cent, as actual earnings of N18.63tn fell short of the projected N30.67tn. In the third quarter alone, revenue generation stood at N7.70tn, below the target of N10.22tn by N2.52tn, with the Budget Office citing persistent oil revenue shortfalls despite stronger non-oil collections.
The debt burden also continued to squeeze fiscal spending, with capital expenditure standing at only N3.10tn in the first nine months of 2025, compared to a budgeted N17.58tn for the period. Actual debt-related payments were therefore more than four times the amount spent on capital projects. The report warned that the debt service-to-revenue ratio remained elevated and stressed the need for urgent revenue mobilisation and expenditure rationalisation. Overall government expenditure stood at N24.66tn, below the prorated budget of N41.24tn by N16.58tn, while the fiscal deficit was recorded at N6.03tn against a projected N10.58tn. Financing for the deficit totalled N12.07tn, driven largely by N4.81tn in multilateral and bilateral project-tied loans and N7.08tn in domestic borrowing.
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