Market News
Domestic debt servicing gulps N5.28tn in six months - PUNCH
Nigeria spent N5.28tn servicing its domestic debt between January and June 2026, as interest payments on government securities continued to absorb substantial public funds.
Data released by the Debt Management Office show that interest and rental payments accounted for N4.95tn of the expenditure, while another N333.96bn went towards repaying the principal on promissory notes.
The figures highlight the financial burden of domestic borrowing on government resources at a time when Nigeria faces competing demands for infrastructure, public services and other development priorities.
It also shows the heavy impact of debt repayment on Nigeria’s finances.
Federal Government bonds accounted for the largest share of domestic debt interest payments, costing N3.35tn during the six-month period.
Nigerian Treasury Bills followed with N1.49tn in interest payments, making the two instruments the dominant contributors to the government’s domestic debt-servicing bill.
Monthly payments on Federal Government bonds fluctuated considerably. They rose from N462.44bn billion in January to N707.25bn in February, peaking at N792.34bn in March.
The amount subsequently fell to N530.84bn in April and N332.49bn in May before increasing to N525.05bn in June.
Treasury bill interest payments reached N1.49tn over the period, with March recording the highest monthly amount of approximately N481.47bn.
Other domestic debt instruments also attracted payments. The government spent N92.29bn billion on rentals for Federal Government Sukuk, while interest payments on FGN Savings Bonds amounted to N8.90bn. Green bond interest payments stood at N5.56bn.
The figures indicate that conventional government bonds and T-bills accounted for most of the cost of servicing Nigeria’s domestic debt in the first half of the year.
Beyond interest expenses, the Federal Government repaid N333.96bn in principal on promissory notes between January and June.
March recorded repayments of N154.23bn, while June followed with N136.96bn, making them the largest monthly contributors to principal repayments during the period.
Of the total, N263.27bn related to naira-denominated promissory notes, while foreign-currency-denominated notes accounted for N70.69bn.
Total monthly domestic debt service, covering interest, rentals and principal repayments, also varied significantly. March recorded the highest expenditure at N1.43tn, followed by February at N967.67bn.
June’s total stood at N811.62bn, while April recorded N765.19bn and January N741.82bn. May had the lowest monthly outlay at N567.16bn.
These fluctuations reflect the timing of interest obligations and principal repayments across the government’s domestic debt instruments.
The N5.28 trillion expenditure adds to concerns about the growing share of government revenue required to meet debt obligations, potentially limiting the funds available for capital projects and essential public services.
“If you keep spending this huge amount on repaying your local debt, you will be left with less for important development issues,” said an Abuja-based economist, Nonso Iheoma.
“Though we can’t do without debts, we can do well by changing the sources of the debts. During this period, returns on fixed-income securities exceeded or were close to 20 per cent due to high interest rates,” he added.
Nigeria’s total debt-service expenditure reached approximately N16tn in 2025, reflecting the pressure from domestic interest payments and external debt obligations.
