Nigeria’s fiscal struggles deepened in January 2025 as the Federal Government’s debt servicing costs surpassed its retained revenue by a wide margin, according to the Central Bank of Nigeria’s (CBN) January 2025 Monthly Economic Report.
The report revealed that the government spent ₦696.27 billion on debt servicing in January, while total retained revenue stood at just ₦483.47 billion. This means that debt servicing alone consumed approximately 144% of all federal earnings during the period, highlighting the country’s worsening debt burden and limited fiscal capacity.
Despite a marginal improvement in some revenue categories, retained earnings were still insufficient to meet obligatory debt payments, reinforcing the government’s growing dependence on borrowing to finance basic operations.
A closer look at the data shows that the ₦483.47 billion retained revenue in January reflected only a 0.89% increase compared to the ₦479.21 billion recorded in January 2024. However, this slight uptick was overshadowed by mounting debt service obligations.
According to the CBN report:
“FGN retained revenue declined in the review period, owing largely to lower receipts from Federal Government Independent Revenue and FGN’s share of exchange gain. At ₦0.48 trillion, provisional FGN retained revenue was 69.19% and 70.40% below the levels recorded in the preceding period and monthly target, respectively.”
Revenue breakdowns show that the Federation Account contributed ₦167.69 billion, while the VAT Pool Account delivered ₦90.73 billion. Independent Revenue, which reflects the financial efficiency of government Ministries, Departments, and Agencies (MDAs), fell sharply to ₦32.28 billion—a 66.14% year-on-year drop from ₦95.34 billion in January 2024.
Meanwhile, exchange gains offered some relief, rising by 35.6% from ₦138.67 billion in January 2024 to ₦188.09 billion in January 2025, providing a crucial cushion for the government’s revenue base.
The report underscores the fragile state of Nigeria’s public finances, driven by weak revenue performance and ballooning debt obligations—factors that continue to limit fiscal manoeuvrability in the face of pressing development needs.
