Debt service to gulp nearly half of Nigeria’s 2026 revenue, Tinubu says

President Bola Tinubu has warned that Nigeria will spend about $11.6 billion servicing its debt in 2026. That amount is nearly half of the government’s projected revenue for the year. He made the remarks on Tuesday at the Africa Forward Summit in Nairobi, co-hosted by Kenya and France.

High borrowing costs hurt development

Tinubu said debt servicing is crowding out spending on infrastructure, healthcare and education. He noted that despite a tax overhaul aimed at boosting revenues, the cost of borrowing remains a heavy burden. In 2025, Nigeria spent $5.15 billion on debt service, according to the Debt Management Office.

“Every single dollar that leaves our treasury to pay punitive interest rates is a dollar that did not go into our steel sector, our textile mills, our agro-processing plants, or our digital industries,” Tinubu told leaders from more than 30 countries.

He added that the money also means fewer trained engineers and less affordable power for factories.

Global system penalises Africa

Tinubu said Nigeria’s painful reforms have stabilised the economy. He listed the removal of fuel and energy subsidies, the naira devaluation and tax changes as key steps. But he argued that the gains are being eroded by a global financial system that treats African sovereigns as high-risk borrowers, driving up interest costs.

Analysts from the Nigerian Economic Summit Group recently identified debt servicing as a key vulnerability for the country.

Tinubu called for cheaper financing and deeper economic integration that prioritises Africa’s growth. He also urged curbs on illicit financial flows and more support for industrialisation. Africa still accounts for less than 2% of global manufacturing, he noted.

“Nigeria is not asking for charity,” Tinubu said. “We’re demanding a financial system that intentionally enables Africa to industrialize, to process its own minerals, refine its own crude oil, manufacture its own pharmaceuticals, and compete fairly in global markets.”

Now in his third year in office and aiming for re-election in January 2027, Tinubu has rolled out Nigeria’s biggest reforms in decades. He said the reforms have lifted investor sentiment but warned that global financial rules must change for the gains to last.