With a total expenditure package of N47.90trillion, it would mean that the government plans to spend 33.1% of its expenditure on debt servicing in the 2025 fiscal year.
The administration of President Bola Tinubu has announced plans to spend N15.81trillion on debt servicing in the 2025 fiscal year.
With a total expenditure package of N47.90trillion, it would mean that the government plans to spend 33.1% of its expenditure on debt servicing in the 2025 fiscal year.
This plan comes despite worries on the impact of debt servicing on the country’s development.
Already, SaharaReporters reported that the government plans to spend N50.2 trillion on debt servicing in the next three years.
The N15.81 trillion planned by the government be spent in 2025 is an increase from what it inputed in its 2025 MTEF document.
Earlier in the MTEF document, the government noted that in 2025, it plans to spend N15.3 trillion on debt servicing, it plans to spend N15.5 trillion in 2026 and another N19.4 trillion in 2027.
Already, the government in its medium term expenditure framework of between 2025 and 2027, admitted that debt service impacts ability of the country to develop.
“The sustainability of public debt remains a significant concern, as high debt servicing costs and limited fiscal space constrain the government's ability to invest in critical sectors such as healthcare, education, and infrastructure.” the MTEF document reads.
“Total debt service cost in 2023 was N8.56 trillion. This represents 37% of FGN expenditure and 69% of revenues. Improved domestic resource mobilization will significantly reduce government’s borrowing requirement.” it further read.
While admitting the impacts of heavy reliance on loans, the Tinubu-led administration has not stopped borrowing.
The World Bank recently approved $500million loan for the Tinubu-led administration, the tenth disbursement it would approve for his administration.
As of June 2024, the country’s public debt grew to N134.2 trillion, up from the N87.3 trillion it stood at when Tinubu came into power.