Nigeria’s domestic debt-service payments saw a significant decline, falling by about N1 trillion to N2.14 trillion in the second quarter of 2026. This marks a 31.8% decrease from the N3.14 trillion recorded in the first quarter, according to data from the Debt Management Office (DMO).
Interest and rental payments comprised the majority of the Q2 total, amounting to N1.98 trillion, while principal repayments were significantly lower at N164.28 billion. The largest share of interest payments came from Federal Government bonds, totaling N1.39 trillion for the quarter.
Despite the drop in domestic debt-service payments, Nigeria's overall public debt stock increased to N166.79 trillion as of June 30, 2026. This rise in total debt included N91.59 trillion in domestic debt, which represents 54.91% of the public debt portfolio.
The reduction in quarterly domestic debt service payments is noteworthy, especially considering the sharp increase in costs at the beginning of the year. In Q1, domestic debt-service payments were 37.5% higher than in Q4 2025, highlighting a shift in fiscal dynamics.
As Nigeria navigates these financial changes, the fixed-income market has provided attractive sovereign yields, although a recent easing cycle has begun to compress returns across the curve.