Nigeria spent ₦5.28tn 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 ₦4.95tn of the expenditure. Another ₦333.96bn 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.
They also show the heavy impact of debt repayment on Nigeria’s finances.
Federal Government bonds made up the largest share of domestic debt interest payments, costing ₦3.35tn over the six-month period.
Nigerian Treasury Bills followed with ₦1.49tn in interest payments. Together, the two instruments were the dominant contributors to the government’s domestic debt-servicing bill.
Monthly payments on Federal Government bonds fluctuated considerably. They rose from ₦462.44bn in January to ₦707.25bn in February, then peaked at ₦792.34bn in March.
The amount later fell to ₦530.84bn in April and ₦332.49bn in May, before rising to ₦525.05bn in June.
Treasury bill interest payments reached ₦1.49tn over the period, with March recording the highest monthly amount at about ₦481.47bn.
Other domestic debt instruments also attracted payments. The government spent ₦92.29bn on rentals for Federal Government Sukuk.
Interest payments on FGN Savings Bonds amounted to ₦8.90bn, while green bond interest payments stood at ₦5.56bn.
The figures indicate that conventional government bonds and Treasury 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 ₦333.96bn in principal on promissory notes between January and June.
March recorded repayments of ₦154.23bn, while June followed with ₦136.96bn. These were the largest monthly contributors to principal repayments in the period.
Of the total, ₦263.27bn related to naira-denominated promissory notes, while foreign-currency-denominated notes accounted for ₦70.69bn.
Total monthly domestic debt service, covering interest, rentals and principal repayments, also varied significantly. March recorded the highest expenditure at ₦1.43tn, followed by February at ₦967.67bn.
June’s total stood at ₦811.62bn, while April recorded ₦765.19bn and January ₦741.82bn. May had the lowest monthly outlay at ₦567.16bn.
These fluctuations reflect the timing of interest obligations and principal repayments across the government’s domestic debt instruments.
The ₦5.28tn expenditure adds to concerns about the growing share of government revenue needed to meet debt obligations. This could limit 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 about ₦16tn in 2025, reflecting pressure from domestic interest payments and external debt obligations.
