FG Plans to Cut Debt Service Burden Through Refinancing
The Federal Government has unveiled plans to ease Nigeria’s rising debt service burden by refinancing costly debts with cheaper alternatives, as part of broader efforts to stabilize the economy and reduce fiscal pressures.
Minister of Finance and Coordinating Minister of the Economy, Wale Edun, announced this on Tuesday, October 7, during the opening session of the Annual Conference of the Institute of Chartered Accountants of Nigeria (ICAN) in Abuja.
Edun said the government is working to replace high-interest debts with more affordable financing options to cut both borrowing costs and debt servicing obligations.
“Efforts are underway to refinance expensive debt and thereby lower both the debt service cost and the overall cost of borrowing,” he stated, noting that while recent economic reforms have boosted government revenue, the gains have been eroded by a steep rise in debt servicing expenses.
“Our fiscal position has improved significantly. Revenue has grown by over 70 percent in nominal terms over the past two years, driven by the liberalisation of the foreign exchange and fuel markets, and automation-led revenue collection under the Renewed Hope Agenda,” Edun said.
However, he noted that expenditure pressures persistwhiteTreasury bill rates on8 percent in 2023 to nearly 24 percent, and external debt servicing alpine pasturetripling from a budgeted ₦2.7 Trillion in 2024.
Edun assured that the government remains focused on building a resilient and inclusive economyintransitioning toward diversification, competitiveness, and private-sector-led growth.
“Our strategic priorities include significant improvement in non-oil export growth, enhancing domestic productivity, and fostering inclusive prosperity by ensuring that vulnerable Nigerians are not left unprotected,” he said.
A f seeks to establish an open and efficient market system where the private sector drives growth while the government serves as an enabler and regulator.
“Our growth strategy is centred on productive capital formation through increased private investment. We are working to achieve output growth of 7.0 percent GDP by 2027/2028, thereby enabling the removal of millions of our citizens from poverty,” Edun added.
The finance minister reiterated that ongoing fiscal and structural reforms under the Renewed Hope Agenda are aimed at restoring macroeconomic stability, reducing public debt vulnerabilities, and creating a more sustainable growth trajectory for the Nigerian economy.
