Nigeria's domestic debt-service payments declined by about N1 trillion to N2.14 trillion in the second quarter of 2026, compared with N3.14 trillion recorded in the first quarter, according to data from the Debt Management Office (DMO). The drop represents a 31.8 percent quarter-on-quarter reduction and signals a moderation in the cost of servicing local obligations even as the country's total public debt stock expanded.
Interest and rental payments accounted for N1.98 trillion of the Q2 total, while principal repayments stood at N164.28 billion.
Federal Government bond interest payments were the largest component of the domestic debt-service bill, reaching N1.39 trillion during the quarter. Monthly bond interest settlements came to N530.84 billion in April, N332.49 billion in May and N525.05 billion in June.
Interest payments on Nigerian Treasury Bills amounted to N488.80 billion, split across N180.64 billion in April, N201 billion in May and N107.16 billion in June. FGN Sukuk rental payments totalled N92.29 billion, with N27.49 billion paid in April, N29.38 billion in May and N35.42 billion in June. Interest payments on FGN Savings Bonds reached N4.66 billion, while the FGN Green Bond accounted for N5.56 billion.
Principal repayments remained substantially lower than interest and rental payments. The largest principal settlement occurred in June, when the government paid N136.96 billion, comprising N66.27 billion in local-currency promissory notes and N70.69 billion in foreign-currency promissory notes. Local-currency promissory note repayments of N24.68 billion were made in April and a further N2.64 billion in May. No foreign-currency promissory note principal repayment was recorded in April or May.
The Q2 decline follows a sharp rise in domestic debt-service costs at the start of the year, when the N3.14 trillion first-quarter bill was 37.5 percent higher than the N2.28 trillion recorded in Q4 2025. In Q1, interest payments accounted for N2.97 trillion and principal repayments stood at N169.68 billion.
The reduction in quarterly domestic debt service came despite an increase in Nigeria's overall public debt stock. The DMO reported that total public debt rose to N166.79 trillion as of June 30, 2026, from N159.35 trillion at the end of March. Domestic debt stood at N91.59 trillion, representing 54.91 percent of the total portfolio, while external debt amounted to N75.20 trillion.
