Nigeria’s debt service payments declined sharply in January 2026, falling by 38.5 percent year on year to $405.3 million, according to fresh data released by the Central Bank of Nigeria.
Figures contained in the apex bank’s International Payments report show that the Federal Government spent far less on servicing its obligations compared with the same period in 2025, when debt service payments stood at $659.7 million.
The report also indicates that the easing trend extended to the full-year debt profile. Total debt service payments dropped by 2.95 per cent to $7.22 billion in 2025, down from $7.44 billion recorded in 2024. The decline reflects lower servicing costs across key domestic instruments that make up the bulk of Nigeria’s borrowing structure.
A major share of the reduction came from obligations tied to Federal Government of Nigeria Bonds and Nigerian Treasury Bills, which together account for the largest portion of domestic debt servicing. Analysts say the lower payments point to moderation in new issuances in the primary market as well as softer yields across the fixed income market during the period under review.
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Despite the drop in servicing costs, borrowing activity remained strong as the government continued to rely on the domestic bond market to finance budget deficits. The Debt Management Office raised about N5.26 trillion through the FGN bond market in 2025, even as investor appetite remained robust with total subscriptions hitting N8.96 trillion.
Investor demand remained strong at the start of 2026. In January, the debt office exceeded its initial N900 billion target and raised N1.54 trillion through the sale of three FGN bond instruments, reflecting continued confidence in government securities.
Meanwhile, Nigeria’s domestic debt stock has continued to expand. Data from the debt office shows that as of September 30, 2025, the country’s domestic debt had risen to N77.81 trillion, largely driven by increased issuance of Federal Government bonds to finance fiscal deficits.
The latest figures highlight a complex fiscal picture in which Nigeria’s debt servicing burden is easing in the short term, even as the overall stock of domestic debt continues to climb.
