Financial expert raises alarm over Nigeria’s soaring debt servicing costs

In a critical analysis of Nigeria’s fiscal policies under President Bola Tinubu, Tileriwa Adebayo, CEO of The CFG Advisory, has flagged the rising cost of debt servicing as a major concern for the country’s economic stability.

Speaking during an appearance on Arise Change on Arise Television on Tuesday, Adebayo highlighted the surge in debt servicing expenditure from ₦8 trillion in 2024 to ₦16 trillion in 2025 as a significant red flag.

“The fiscal regime under President Bola Tinubu has a red flag. Debt service has increased from ₦8 trillion last year to ₦16 trillion.

That is alarming because debt servicing at ₦16 trillion surpasses combined allocations for Defence, Security, Infrastructure, Health, and Education, which total ₦14 trillion,” Adebayo explained.

He further broke down the financial strain, pointing out that the nation’s recurrent and capital expenditures each stand at ₦14 trillion. “When you compare key spending areas, debt servicing has now overtaken everything else, which is a troubling trend,” he added.

Adebayo called for immediate restructuring of the government’s financial obligations to address the escalating debt burden.

He suggested the sale of strategic assets as a viable solution to reduce reliance on borrowing.

“It’s essential for the government to restructure its balance sheet and consider selling off assets to pay down some of these debts.

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This approach would improve Nigeria’s credit rating and transition the country from junk bond status to investment-grade status, thereby lowering borrowing costs internationally,” Adebayo emphasized.

His remarks come in the wake of President Tinubu’s presentation of the 2025 “Budget of Restoration” to a joint session of the National Assembly on December 18, 2024.

The proposed ₦49.70 trillion budget aims to prioritize defence, infrastructure, and human capital development but is burdened by a projected deficit of ₦13.39 trillion, to be financed through borrowing.

Economic analysts have raised concerns over the potential ramifications of Nigeria’s rising debt levels, warning that unchecked borrowing could destabilize the nation’s fiscal framework. Adebayo’s observations align with those of other experts who have cautioned against the long-term implications of the 2025 budget projections.

“Failure to address the growing debt burden could push Nigeria further into fiscal instability, jeopardizing its credit ratings and making it harder to secure affordable financing,” Adebayo warned.

As Nigeria grapples with these financial challenges, calls for innovative and sustainable economic strategies are growing louder, underscoring the need for urgent reforms to restore fiscal balance and ensure long-term stability.