An increase in debt servicing is one of the challenges Nigeria’s fiscal performance is set to face in 2025, as the National Assembly, comprising the Senate and House of Representatives, passed the 2025 appropriation bill of N54.9 trillion, out of which 14.3 trillion was allocated to service the country’s debt in the fiscal year.

The allocation of such funds to debt servicing indicates that the country’s debt rate has continued to claim a huge amount and portion of the government’s revenue, raising the question of the government’s ability to sustain and contain the country’s economic challenges.

The lawmakers approved the appropriation bill after increasing the budget figures from the N54.2 trillion the President proposed to N54.9 trillion during their plenary session on Thursday, adding N700 billion to the figures suggested by the executive arm of government.

The passed budget includes N3.65 trillion for statutory transfer, N14.32 trillion for debt service, N13.06 trillion set aside for ongoing (non-debt) spending, and N23.96 trillion to be added to the development fund for capital spending.

President Bola Tinubu had, on December 18, presented N47.9 trillion as the 2025 annual budget to a joint session of the National Assembly. Tagged the “Budget of Restoration,” the president said the budget would serve as a roadmap for his administration to restore the country to economic stability, improve lives, and reposition the country for greater performance.

On February 5, 2025, the President wrote to the National Assembly to increase the fiscal budget from the earlier proposed 49.7 trillion to 54.2 trillion, citing more revenue that has been generated by some revenue-generating agencies of the Federal Government, including the Federal Inland Revenue Service (FIRS) and Nigeria Customs Service (NCS), among others, in 2024 as reasons for the augmentation.

Before the passage of the budget, several ministries, agencies, and departments were invited by the appropriation committee of the legislative arm to defend their financial obligations in the previous year and how they intend to spend in the coming year.

Senator Olamilekan Adeola, chairman of the appropriation committee, and Abubakar Bichi, his counterpart in the House, said, “The House receives the report of the Committee on Appropriations for the Bill of an Act to authorise the release of the total sum of N54.9 trillion from the Consolidated Revenue Fund of the Federation.” This meant that they met the requirements of the committee.

“This includes N3.6 trillion for statutory transfers, N14.3 trillion for debt service, N13.6 trillion for recurrent (non-debt) expenditure, and N23.9 trillion for the Development Fund for capital expenditure for the year ending December 31, 2025,” they said.

The 2025 budget framework is also approved based on an oil price benchmark of $75 per barrel, as oil production is projected to be 2.06 million barrels per day at the exchange rate of one N1,400 (to the dollar).