Nigeria’s debt servicing costs exceed budget framework by N1.78trn in 9 months

The federal government spent a total of N12.52 trillion on debt servicing in the first nine months of 2025, exceeding the N10.74 trillion allocated in the national budget by N1.78 trillion.

According to the 2025 third-quarter budget implementation report published by the Budget Office of the Federation, these figures highlight severe fiscal overruns. Retained revenue for the period stood at N16.48 trillion, representing a 42.20 percent shortfall—equivalent to N12.03 trillion—from the three-quarter prorated budget estimate.

Revenue shortfalls widen across multiple sectors

A BusinessDay analysis of the fiscal data shows that a total of N6.23 trillion was utilised to service domestic debt between January and September, outstripping the budgeted N5.39 trillion. Similarly, foreign debt servicing consumed N6.30 trillion, surpassing the initial budgetary provision of N5.06 trillion. This combined expenditure meant that debt servicing absorbed 67.20 percent of the federal government’s N18.63 trillion retained revenue during the nine-month window.

The government’s gross revenue declined by 39 percent to N18.60 trillion, leaving a N12.00 trillion gap when compared to the N30.60 trillion projected for the period. Under the amended budget framework, N40.89 trillion was projected to fund the federal budget for the entire year, indicating a quarterly target of N10.22 trillion. However, actual revenue generation consistently lagged, coming in at N4.95 trillion in the first quarter, N5.97 trillion in the second quarter, and N7.70 trillion in the third quarter.

Non-oil revenue streams fall below expectations

The analysis further reveals that total gross non-oil revenue amounted to N17.38 trillion, down by N789.55 billion against the N18.17 trillion budget estimate. Among the non-oil revenue streams, company income tax generated N7.53 trillion, value-added tax accounted for N6.41 trillion, and the electronic money transfer levy brought in N310.42 billion.

The solid minerals and mining sector offered a bright spot, recording N54.79 billion in revenue. This marks an 87.21 percent increase, or N24.12 billion, above the three-quarter budget estimate of N27.66 billion. Conversely, exchange gains—which had zero initial projections—yielded N84.70 billion over the three quarters under review.

Underperformance plagues oil sector earnings

Several key revenue collections fell short of their targets. The Nigerian Police Trust Fund levy generated N0.47 billion against a target of N3.75 billion, customs and excise duties brought in N2.83 trillion against a budgeted N4.65 trillion, and special federation account levies raised N209.43 billion against a projected N718.82 billion.

Oil sector revenues also significantly underperformed. Revenue from crude oil and gas sales stood at N1.33 trillion, petroleum profit and gas taxes brought in N6.14 trillion, royalties amounted to N5.54 trillion, and incidental oil revenue reached N475.90 billion. These streams all underperformed against their respective prorated three-quarter projections of N3.53 trillion, N23.54 trillion, N0.30 trillion, and N887.65 billion.

In contrast, the federal government generated N32.72 billion from concessional rentals and N39.38 billion from miscellaneous pipeline fees, outperforming their three-quarter targets of N15.07 billion and N15.02 billion respectively.