The Grapes of Wrath, Part XII: Nigeria, Where Debt Devours Nearly Every Naira of State Revenue

A country that earned a naira and owed it
Imagine a household that hands over ninety-six kobo of every naira it earns before buying a single bag of rice. That was Nigeria in 2022. The World Bank found the government spent 96.3 percent of its revenue simply servicing its debt, up from 83.2 percent the year before. Africa’s largest economy was, in effect, working almost entirely for its lenders. Everything else, salaries, schools, hospitals, roads, had to be squeezed from the sliver that was left, or borrowed all over again.

This is the quiet violence of interest. It does not announce itself with a coup or a currency crash. It arrives as an accounting line that grows a little each year until, one budget cycle, it swallows nearly the whole plate.

The mountain of naira
The raw scale is dizzying. As of 31 March 2025, Nigeria’s total public debt stood at about 149 trillion naira, split between roughly 70.63 trillion in external debt and 78.76 trillion owed at home. The previous administration under Muhammadu Buhari alone had left behind some 77 trillion naira, about 167 billion dollars, in obligations to local and foreign creditors.

But the principal is only half the story. Interest is the part that bites every year regardless of what a country does. Nigeria’s interest payments climbed from about 5.60 trillion naira in 2024 to 8.24 trillion in 2025, a jump of roughly 47 percent in a single year. Those are naira that can never build a clinic or pay a teacher; they exist only to rent money the country has already spent.

When the subsidy went, the pain came
In May 2023, President Bola Tinubu stood at his inauguration and uttered four words that reordered millions of lives: “subsidy is gone.” The fuel subsidy, which had ballooned from about 0.7 percent of GDP in 2021 to 2.3 percent in 2022, was itself being financed largely through borrowing. Removing it was meant to stop the bleeding. Instead it exposed just how thin the cushion beneath ordinary Nigerians had become.

Petrol prices are the great multiplier of Nigerian life. When they rise, the cost of a bus fare, a bag of tomatoes, a bowl of garri and a bag of cement all rise with them. The removal fed an inflationary surge in a country where roughly 133 million people already lived in multidimensional poverty. Food inflation alone in the preceding period was estimated to have pushed around five million more Nigerians below the poverty line. The macro line item, “debt service,” landed in kitchens as smaller portions and colder stoves.

The arithmetic that will not bend
Officials point, fairly, to improvement. The Vice President, Kashim Shettima, has said the debt-service-to-revenue ratio fell from about 120 percent to 68 percent, and the government’s own budget office reported that debt service consumed roughly 69 percent of 2024 revenue. Yet even the rosier figures describe a state handing over two-thirds of what it collects to creditors before it governs at all, and independent analysts at the Nigerian Economic Summit Group put the 2024 ratio far higher, near 117 percent, meaning Nigeria at times owed more in debt service than it earned.

That is the trap of interest-based borrowing laid bare. A country can raise taxes, remove subsidies, devalue its currency, and still find the coupon waiting at the front of the queue. Total debt payments rose from about 12.83 trillion naira in 2024 to 15.81 trillion in 2025. The state runs faster, and the treadmill runs faster still.

The macro cost is a micro wound
It is tempting to read these numbers as abstractions traded between the Debt Management Office and bondholders in distant markets. They are not. Every trillion naira spent on interest is a trillion not spent on the primary-health centre that never reopened, the university lecturer on strike, the road that floods each rainy season. Nigeria’s debt is not a spreadsheet problem; it is a development problem wearing a spreadsheet’s clothes. The interest is paid on time. The citizen’s dividend is perpetually deferred.

Anatomy of a swelling bill
Break the bill into its parts and the danger sharpens. Domestic debt servicing alone leapt from about 5.87 trillion naira in 2024 to 8.61 trillion in 2025, a rise of nearly 47 percent in a single year, while external servicing climbed from 4.66 billion dollars to 5.15 billion. Most striking of all, interest payments now make up more than 95 percent of Nigeria’s domestic debt service. Read that carefully: almost none of that vast sum is actually retiring what the country owes. It is pure rent on borrowed money, buying not one naira of reduction in the principal. The debt is not being paid down; it is being paid for, over and over. And because so much of it is owed in foreign currency, every slide in the naira, every reform that weakens the exchange rate, quietly inflates the pile again. This is the machine at the heart of Nigeria’s predicament: a bill that grows faster than the measures meant to tame it, feeding on the very reforms designed to bring it under control.

The Question of Direction: Grow or Grovel?
Nigeria’s dilemma is no longer whether it can borrow, but whether it can escape needing to. The country’s revenue base is dangerously narrow for an economy its size, which is why even modest debt looms so large against it. The direction that matters now is not another restructuring or a fresh Eurobond, but the harder work of widening what the state actually earns, from tax, from oil transparency, from a productive private economy, so that interest shrinks back to a footnote instead of the headline. Until then, Africa’s giant will keep earning a naira and owing it, and its people will keep paying the difference.