FG spends N8.9trn on debt servicing in nine months, says CBN

The Central Bank of Nigeria (CBN) has revealed that the Federal Government spent N8.9 trillion on debt servicing in the nine months of 2024, accounting for 47per cent of total expenditure during the period.

The quarterly statistical bulletin of the CBN showed that the amount represents a 56.8per cent increase from the N5.69 trillion spent in the same period of 2023.

The rising debt servicing cost highlights the growing burden of Nigeria’s debt obligations amidst widening fiscal deficits.

The debt-to-revenue ratio rose significantly, with debt servicing consuming 147 per cent of retained revenue in the first nine months of 2024. This compares unfavorably to 2023, when the ratio stood at 132per cent.

The government retained N6.08 trillion in revenue during the period, while debt servicing costs overshadowed this figure. This trend indicates an increasing reliance on borrowing not just for budgetary operations but also for servicing existing debts.

Recurrent expenditure rose sharply to N15.11 trillion in the first nine months of 2024, up by 45.6 per cent from N10.38 trillion in the same period of 2023. Key components of recurrent spending included:

Personnel costs: Increased by 20 per cent to N3.59 trillion, from N2.99 trillion.

Overhead costs: Rose by 51.4 per cent to N892.85 billion, from N589.63 billion.

Transfers: More than doubled, increasing by 83.8 per cent to N1.31 trillion from N711.36 billion.

Pensions and gratuities: Declined marginally from N339.66 billion in 2023 to N336.61 billion in 2024.

Capital expenditure also increased, rising by 20.8 per cent to N3.86 trillion, compared to N3.19 trillion in 2023. However, the growth in capital spending remained modest compared to recurrent expenditure, underscoring how rising debt obligations continue to crowd out critical investments in infrastructure.

The fiscal deficit expanded by 39.3 per cent, rising from N9.25 trillion in the first nine months of 2023 to N12.89 trillion in the same period of 2024.

This growing deficit reflects the persistent gap between government revenue and expenditure, compounded by escalating debt servicing costs.