(3 Minutes Read)
Nigeria’s fiscal crisis worsened in January 2025 as the Federal Government’s retained revenue dropped sharply by 69.19% from December 2024, falling to ₦483.47 billion, according to the Central Bank of Nigeria’s latest report.
This dramatic decline led to debt servicing costs—₦696.27 billion—far exceeding total earnings, with debt repayments consuming 144% of the government’s income. Despite modest improvements in some revenue streams, the overall intake was insufficient to meet obligations without additional borrowing.
Compared to January 2024, revenue growth was minimal, increasing by just 0.89%, reflecting stagnation rather than progress. Key revenue sources such as Federal Government Independent Revenue, plunged by over 66%, and there were no contributions from excess crude oil sales. Although exchange gains rose and VAT and Federation Account allocations provided support, they were not enough to offset declining revenues.
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This situation marks a sharp deterioration from December 2024, when debt servicing accounted for 44.37% of revenue. While debt costs slightly decreased year-on-year, the revenue collapse caused Nigeria’s debt-to-revenue ratio to worsen significantly, revealing a growing dependence on borrowing.
The IMF has flagged these vulnerabilities, cited lower oil prices and called for enhanced domestic revenue mobilisation. Analysts warn that without substantial reforms and improved fiscal discipline, Nigeria risks an even wider fiscal deficit and mounting debt sustainability concerns in 2025.
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