Nigeria’s recurrent debt profile overshot government projections by a staggering N1.63 trillion in the fourth quarter of 2024.
This is according to the Budget Office of the Federation (BOF)’s Q4 2024 Budget Implementation Report.
The report revealed that total recurrent debt stood at N3.69 trillion, representing an increase of N1.63 trillion or 78.63 per cent above the N2.07 trillion projected for the quarter.
The sharp rise demonstrates mounting fiscal pressures driven by rising interest payments and external debt servicing obligations.
According to the Budget Office, there was no interest payment on Ways and Means during the review period due to the successful securitization of the outstanding balance earlier in the year.
However, debt service payments to domestic and external creditors continued to weigh heavily on government finances.
A total of N1.32 trillion was spent on servicing Federal Government domestic debt in the fourth quarter, slightly N6.97 billion (0.53 per cent) above the prorated quarterly estimate. Meanwhile, external debt service obligations far exceeded projections, with actual payments reaching N2.12 trillion against a projected N686.90 billion — a difference of N1.42 trillion (207.14 per cent).
The report attributed the sharp jump in external debt service payments to exchange rate adjustments and maturing obligations under various bilateral and multilateral loan agreements.
N4.79 trillion budgeted for MDAs
Beyond debt obligations, the Budget Office provided updates on personnel and overhead expenditures.
It disclosed that N4.79 trillion was appropriated for the personnel costs of Ministries, Departments, and Agencies (MDAs) in the 2024 fiscal year. This translates to a prorated quarterly expenditure outlay of N1.2 trillion.
Actual spending, the report noted, met 100 per cent of the full-year projection, indicating that personnel expenses were fully funded as planned.
The report also stated, “A total of N671.15 billion was released as overhead cost in the fiscal yea,r which was N101.98 billion (13.98 per cent) lower than the budget projection of N773.13 billion.”
What this means
The significant overshoot in Nigeria’s recurrent debt in Q4 2024 demonstrates the growing strain on the Federal Government’s fiscal position and the urgent need for tighter debt and expenditure management.
First, the N1.63 trillion variance between projected and actual recurrent debt highlights how debt servicing costs are rising faster than revenue growth, especially in the face of exchange rate depreciation and high external loan obligations. This trend reduces the fiscal space available for critical capital projects and social spending, leaving the government with limited room to stimulate economic growth.
Second, the massive spike in external debt servicing payments—over 200 per cent above projections—signals the vulnerability of Nigeria’s debt portfolio to exchange rate movements and global financial conditions. It also suggests that a significant portion of Nigeria’s external debt is denominated in foreign currencies, making repayments more expensive when the naira weakens.
Furthermore, the 13.98 per cent shortfall in overhead releases suggests continued fiscal constraints, possibly reflecting government efforts to manage cash flow amid rising debt servicing demands. However, the imbalance between recurrent and capital expenditure continues to be a structural weakness in Nigeria’s public finance system.
What you should know
In its latest report, the Debt Management Office (DMO) stated that Nigeria’s total domestic debt service reached N1.707 trillion in the second quarter of 2025 (April–June).
The data shows that the country spent N1.686 trillion on interest payments across multiple debt instruments and N20.14 billion on principal repayments, bringing the total to N1,707,087,151,475.90 for the three-month period.
