Nigeria's Debt Management Office (DMO) has disclosed that the country spent a staggering N5.28 trillion on servicing domestic debt in the first half of 2026. This amount includes N4.95 trillion in interest and rental payments, highlighting the substantial financial burden the government faces as it grapples with increasing debt obligations.
The DMO's report reveals that the bulk of these payments stem from Federal Government bonds, which alone accounted for N3.35 trillion in interest payments. Treasury Bills (NTBs) followed closely with N1.49 trillion. The figures illustrate a worrying trend as Nigeria continues to prioritize debt servicing over critical infrastructure investments and other pressing needs. Notably, the government also made N333.96 billion in principal repayments on promissory notes during the same period, further straining its fiscal resources.
This situation is significant as it underscores the challenges Nigeria faces in managing its debt, especially in a climate where economic reforms are essential for creating fiscal space. The DMO's data indicates that Nigeria's total debt service costs have surged, reaching approximately N16 trillion in 2025. This increase is primarily driven by rising domestic interest payments, which could lead to higher borrowing costs and limit the government's ability to invest in economic growth initiatives. Investors and analysts will be closely monitoring how these developments impact Nigeria's currency stability and overall economic health. In the coming months, the focus will likely shift to potential reforms and strategies the government may implement to alleviate this mounting debt burden.