Nigeria's domestic debt service payments experienced a significant decline in the second quarter of 2026, dropping to N2.14 trillion from N3.14 trillion in the first quarter. This 31.8% reduction highlights a shift in the country's debt management strategy.
According to data from the Debt Management Office (DMO), interest and rental payments accounted for the bulk of the Q2 total, amounting to N1.98 trillion, while principal repayments were notably lower at N164.28 billion.
Key Contributors to Interest Payments
The largest portion of interest payments during Q2 was attributed to Federal Government bonds, which totaled N1.39 trillion. Notably, the government disbursed N530.84 billion in April, N332.49 billion in May, and N525.05 billion in June for these bonds.
Additionally, interest payments on Nigerian Treasury Bills reached N488.80 billion, and FGN Sukuk rental payments contributed N92.29 billion to the total. Overall, interest and rental payments dominated the domestic debt-service bill for the quarter.
Public Debt Dynamics
Despite the decline in domestic debt service, Nigeria's overall public debt increased to N166.79 trillion by June 30, 2026. This rise was not accompanied by a proportional increase in debt-service payments, indicating a complex financial landscape as the government navigates its fiscal responsibilities.