Debt Servicing Eclipses Social Spending Five Times Over – ActionAid

Nigeria spends nearly five times more of its national revenue on servicing external debts than on healthcare and education combined. A damning report by ActionAid International and ActionAid Nigeria revealed the fiscal imbalance on Tuesday. The advocacy group directly accused the International Monetary Fund of pushing hostile policies that deliberately undermine social development. The country currently channels 20.1 per cent of its total incoming revenue toward foreign creditors. In stark contrast, it allocates a dismal 4.06 per cent to health and 4.40 per cent to education. This lopsided spending structure severely traps millions of ordinary citizens in deep poverty.

The report examined twenty-nine official IMF country documents across eleven nations between February 2022 and February 2025. Researchers concluded that skyrocketing debt servicing represents the single largest obstacle to improving global public services. The international lender treated external debt repayments as an unalterable reality in its local policy discussions. It routinely expected lower-income nations to fund vital social sectors using whatever little cash remained. Across all eight African countries studied, the IMF entirely failed to evaluate the tragic trade-offs of these decisions. The institutional focus remains firmly fixed on pleasing foreign bondholders.

Western economic advisers previously pushed the federal government to implement an aggressive, uncushioned fuel subsidy removal. The abrupt policy change triggered immediate, widespread inflation and severe cost-of-living pressures across the country. The regime subsequently reintroduced targeted subsidy measures to avert a complete social collapse. ActionAid notes that the IMF privately acknowledged that compensatory welfare programs were not scaled up quickly enough. Yet, the global lender continues to demand identical regressive measures, including doubling the national Value Added Tax to 15 per cent. These heavy consumption taxes punish poor households while sparing the wealthiest elite.

Nigeria’s public-sector wage bill has remained frozen at a paltry 1.9 per cent of GDP for six consecutive years. This rate ranks as the lowest among all eleven surveyed countries, falling significantly below the African regional average of 7.6 per cent. Despite these starvation wages, foreign technocrats consistently recommend keeping public sector spending strictly capped. Doctors, nurses, and teachers are forced to survive on less than a quarter of the continental standard. This systematic underfunding fuels an ongoing brain drain of highly skilled professional talent to Western nations. The domestic healthcare and schooling systems are rotting from within as a direct consequence.

The critical study described the IMF as an aggressive global debt collector rather than a developmental partner. Its structural adjustment blueprints have remained fundamentally unchanged despite public relations commitments to gender equality and welfare. The local administration now faces the impossible task of balancing international fiscal compliance against domestic human survival. Continued compliance with the current economic framework guarantees a permanent state of infrastructural decay. Breaking this cycle requires a radical rejection of the standard macroeconomic advice coming from Washington. National budgets must begin to prioritize the well-being of citizens over external financial obligations.