Nigeria’s domestic debt service declines to N2.14 trillion in Q2 2026

Nigeria’s domestic debt-service payments fell by about N1 trillion to N2.14 trillion in the second quarter of 2026, from N3.14 trillion in the first quarter.

Data from the Debt Management Office (DMO) showed that this represents a 31.8% decline from the previous quarter.

Interest and rental payments accounted for N1.98 trillion of the Q2 total, while principal repayments stood at N164.28 billion.

FGN bonds drive Q2 interest payments

Interest payments on Federal Government bonds accounted for the largest share of Nigeria’s domestic debt-service bill during the quarter, reaching N1.39 trillion.

• The government paid N530.84 billion in FGN bond interest in April, N332.49 billion in May and N525.05 billion in June.
• Interest payments on Nigerian Treasury Bills (NTBs) amounted to N488.80 billion, comprising N180.64 billion in April, N201 billion in May and N107.16 billion in June.
• FGN Sukuk rental payments stood at N92.29 billion, with N27.49 billion paid in April, N29.38 billion in May and N35.42 billion in June.
• Interest payments on FGN Savings Bonds amounted to N4.66 billion, while the FGN Green Bond accounted for N5.56 billion.

Overall, interest and rental payments totalled N1.98 trillion during the quarter, making up the bulk of the domestic debt-service bill.

Principal repayments remain lower

Principal repayments accounted for N164.28 billion of the Q2 domestic debt-service bill, significantly below interest and rental payments.

• The largest portion was paid in June, when the government settled N136.96 billion in principal obligations.
• June’s payment comprised N66.27 billion in local-currency-denominated promissory notes and N70.69 billion in foreign-currency-denominated promissory notes.
• The government also made N24.68 billion in local-currency promissory note repayments in April.

A further N2.64 billion was paid in May, while no foreign-currency-denominated promissory note principal repayment was recorded in April or May.

Domestic debt service falls despite higher debt

The Q2 decline follows a sharp increase in domestic debt-service costs at the start of the year, when the N3.14 trillion Q1 bill was 37.5% higher than the N2.28 trillion recorded in Q4 2025.

• In Q1, interest payments accounted for N2.97 trillion, while principal repayments stood at N169.68 billion.
• The reduction in quarterly domestic debt service came even as Nigeria’s overall public debt stock increased.
• The DMO reported that total public debt rose to N166.79 trillion as of June 30, 2026, from N159.35 trillion at the end of March.
• Domestic debt stood at N91.59 trillion, representing 54.91% of the total public debt portfolio, while external debt amounted to N75.20 trillion.

The figures show that the increase in Nigeria’s public debt stock in Q2 was not accompanied by a corresponding rise in quarterly domestic debt-service payments.

Nigeria’s fixed-income market delivered some of its most attractive sovereign yields in recent memory during the first quarter of 2026 before a gradual but decisive easing cycle began to compress returns across the curve.