The Federal Government spent significantly less on domestic debt service in January 2026, with payments dropping 38.5 percent year-on-year to $405.3 million, down from $659.7 million in the same month of 2025.
Figures from the Central Bank of Nigeria’s International Payment report reveal the trend extended across the full year, with total debt service payments easing 2.95 percent to $7.22 billion in 2025 compared to $7.44 billion in 2024.
The drop is largely traced to reduced obligations on Federal Government Bonds and Nigerian Treasury Bills, the two instruments that account for the largest share of Nigeria’s domestic debt service burden. Lower primary market issuances and tightening yields in the fixed-income market during the period also contributed to the decline.
Despite the fall in servicing costs, the government remained an active borrower. The Debt Management Office raised N5.26 trillion through the FGN bond market in 2025 to plug the federal budget deficit, attracting total investor subscriptions of N8.96 trillion — nearly double the amount raised.
Early 2026 saw continued strong appetite from investors. In January, the DMO surpassed its N900 billion target by a wide margin, mobilising N1.54 trillion through the auction of three FGN bonds.
Nigeria’s total domestic debt stock nonetheless continued to climb, reaching N77.81 trillion as of September 30, 2025, driven by the sustained pace of FGN bond issuances throughout the year.
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