THE Bola Tinubu administration spent N5.28 trillion servicing domestic debt in the first six months of 2026, with interest payments on government securities accounting for the overwhelming share of the bill and intensifying pressure on public finances.
The Debt Management Office’s latest figures show that the Federal Government paid N4.95 trillion in interest and rental charges between January and June, while principal repayments on promissory notes accounted for another N333.96 billion.
The expenditure highlights the cost of raising funds from the domestic market, where high interest rates have increased the amount the government must pay investors to finance its borrowing requirements.
Nigeria borrows directly from various local institution or through fixed-income instruments such as bonds, Treasury bills, and Open Market Operations, among others..
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Federal Government bonds were the largest contributor to the interest bill, attracting N3.35 trillion in payments during the period. Nigerian Treasury Bills accounted for another N1.49 trillion, leaving other domestic debt instruments with comparatively smaller shares.
The combined payments on bonds and Treasury Bills demonstrate the government’s substantial reliance on market securities and the financial implications of servicing these obligations.
Interest payments on Federal Government bonds climbed from N462.44 billion in January to N707.25 billion in February, reaching N792.34 billion in March.
The monthly bill subsequently dropped to N530.84 billion in April and N332.49 billion in May, before rising again to N525.05 billion in June.
For Treasury Bills, interest payments totalled N1.49 trillion, with March accounting for the highest monthly amount of about N481.47 billion.
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The government also paid N92.29 billion in rentals on Federal Government Sukuk, N8.90 billion in interest on FGN Savings Bonds and N5.56 billion on green bonds.
Principal repayments on promissory notes added to the burden. Of the N333.96 billion paid between January and June, N263.27 billion related to naira-denominated notes, while foreign-currency-denominated notes accounted for N70.69 billion.
March recorded the highest principal repayment at N154.23 billion, followed by June with N136.96 billion.
When interest, rentals and principal repayments are combined, March had the highest monthly domestic debt-service bill at N1.43 trillion. February followed with N967.67 billion, while June recorded N811.62 billion.
The government spent N765.19 billion in April and N741.82 billion in January. May recorded the lowest monthly expenditure at N567.16 billion.
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The rising cost of domestic debt servicing has implications for the government’s ability to fund infrastructure, healthcare, education and other public services. Every additional naira committed to interest payments reduces the resources available for other priorities unless revenue increases or spending is adjusted.
Nonso Iheoma, an Abuja-based economist, warned that the scale of debt repayments could constrain development spending.
“If you keep spending this huge amount on repaying your local debt, you will be left with less for important development issues,” he said.
Iheoma said the government needed to reconsider its borrowing sources, even though debt financing remained necessary.
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“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.
High yields make government securities more attractive to investors but increase the cost of borrowing for the government. Unless the funds raised generate sufficient economic returns or support stronger revenue growth, the resulting interest payments can further restrict fiscal flexibility.
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Nigeria’s total debt-service expenditure reaced approximately N16 trillion in 2025, reflecting the combined weight of domestic interest costs and external debt obligations.
Nigeria’s total public debt climbed to N166.79 trillion as of June 30, 2026, following an increase of N7.44 trillion in the second quarter (Q2).
As of the time former President Mujammadu Buhari left office on May 29, 2023, the nation’s total public debt stood at N87.379 trillion, according to the DMO’s June 2023 data. However, with President Tinubu coming to power that same day, the debt has now risen by nearly N80 trillion in 3 years and 5 months.
The first-half figures underline the challenge facing the Tinubu’s government as it seeks to finance its spending plans while containing borrowing costs and preserving funds for economic development.
