The Federal Government spent N3.14tn servicing domestic debt in the first quarter of 2026, representing a 20.3 per cent increase compared with the N2.61tn spent in the corresponding period of 2025.
The latest figures from the Debt Management Office show that the government’s domestic debt-servicing burden also rose significantly when compared with the preceding quarter.
According to the DMO data, the N3.14tn spent between January and March 2026 was 37.5 per cent higher than the N2.28tn recorded in the fourth quarter of 2025.
Interest payments accounted for the bulk of the expenditure, gulping N2.97tn during the three-month period, while N169.68bn was spent on principal repayments.
The figures highlight the growing pressure of debt obligations on the Federal Government’s finances amid its efforts to fund infrastructure, social programmes and other recurrent and capital expenditures.
A breakdown of the DMO figures showed that interest payments increased progressively during the quarter.
The government paid N726.38bn in interest in January, while the figure rose to N967.67bn in February before climbing further to N1.28tn in March.
For comparison, interest payments in the first quarter of 2025 stood at N2.37tn, while principal repayments were N241.91bn.
The latest figures therefore indicate that although principal repayments were lower year-on-year, the amount spent on interest increased substantially.
The N2.97tn interest bill recorded in the first quarter of 2026 represents an increase of about N600bn over the N2.37tn paid in the same period of 2025.
The rising interest burden underscores the cost of domestic borrowing to the Federal Government and its implications for public finances.
Debt servicing is one of the major obligations competing for government revenue, alongside salaries, pensions, infrastructure development and social interventions.
The DMO figures are expected to further fuel scrutiny of the Federal Government’s borrowing strategy, particularly as policymakers seek to balance deficit financing with the need to maintain debt sustainability.
The increase in debt-servicing costs also places greater emphasis on the government’s ability to expand revenue generation, reduce borrowing costs and ensure that borrowed funds translate into productive investments capable of supporting economic growth.
The Federal Government has continued to pursue fiscal and economic reforms under President Bola Tinubu, including measures aimed at improving revenue mobilisation and strengthening public finances.
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