By Seun Ibiyemi
The Federal Government spent N3.14 trillion on servicing its domestic debt in the first quarter of 2026, reflecting rising pressure from interest obligations and principal repayments, according to the latest report by the Debt Management Office (DMO).
The DMO disclosed that the total domestic debt service comprised N2.97 trillion in interest payments and N169.68 billion in principal repayments during the three-month period.
The expenditure rose steadily throughout the quarter. In January, the government spent N741.82 billion on domestic debt service, increasing to N967.67 billion in February before surging to N1.43 trillion in March.
The March figure represented a 47.7 percent increase from the N967.67 billion recorded in February and was 92.7 percent higher than the N741.82 billion spent in January.
The sharp increase in March meant that the month alone accounted for almost half of the N3.14 trillion spent on domestic debt servicing during the quarter.
According to the DMO, interest payments accounted for approximately 94.6 percent of total domestic debt service in Q1, highlighting the growing cost of servicing the government’s domestic borrowing.
Treasury bills accounted for N1 trillion of the interest payments, while interest payments on Federal Government of Nigeria (FGN) bonds stood at N1.96 trillion.
The government also paid N4.24 billion in interest on FGN Savings Bonds during the quarter.
Meanwhile, the principal component of domestic debt service stood at N169.68 billion, representing repayments on local-denominated promissory notes.
The latest figures underscore the increasing fiscal burden posed by domestic borrowing, particularly as a large proportion of government debt-service expenditure is being channelled towards interest payments rather than reducing the principal debt stock.
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The development comes as Nigeria’s total public debt increased marginally by 0.01 percent to N159.35 trillion in the first quarter of 2026.
The rising debt-service burden remains a major concern for fiscal managers as the Federal Government continues to rely on domestic and external borrowing to finance budget deficits and meet its financial obligations.
President Bola Tinubu had on May 13 disclosed that Nigeria was projected to spend $11.6 billion on debt servicing in 2026, underscoring the scale of the country’s debt obligations.
With domestic debt servicing already reaching N3.14 trillion in the first three months of the year, the Q1 figures are likely to intensify calls for stronger revenue mobilisation, tighter expenditure management and measures to reduce the cost of government borrowing.
