Nigeria’s Domestic Debt Servicing Rises To 164% In 1st Quarter Of 2025

A data emanating from from the Debt Management Office (DMO) has revealed that Nigeria’s domestic debt service bill surged by 164 percent year-on-year in the first quarter of 2025, driven by sharp increases in interest payments on Treasury Bills and Federal Government bonds, reports Business Today NG
According to the DMO data, the federal government spent N2.6 trillion on domestic debt service between January and March, marking a 65 percent increase from the previous quarter.
The rise, according to FBNQuest Merchant Bank, “reflects a recurring seasonal pattern, where debt obligations typically peak in the first quarter of the year due to a higher volume of debt issuances during this period, resulting in a front-loaded debt service profile.”
While treasury Bills were a key driver of the spike, the value of Nigerian Treasury Bills (NTBs) more than doubled to N961 billion, up from N374 billion in Q4 2024.
This pushed their share of total domestic debt service to 36.8 percent, from 23.7 percent in the previous quarter.
Interest payments on FGN bonds also rose substantially, accounting for 54 percent of total debt service costs. In absolute terms, bond payments increased by 47 percent year-over-year to over N1.4 trillion, with regular bonds accounting for N1.3 trillion of that amount.
There was also an interest payment of almost N68 billion on FX-denominated domestic bonds during the quarter.
FBNQuest stated in a note to clients recently that “the upward trend in domestic debt servicing underscores the persistent fiscal strain faced by the government, largely stemming from continued revenue underperformance.”