ActionAid slams IMF over Nigeria’s massive debt burden

Nigeria is allocating a disproportionately large share of its national revenue to servicing external debts, far exceeding combined spending on essential public services like healthcare and education. A new report by ActionAid International and ActionAid Nigeria reveals that Nigeria dedicates 20.1% of its national revenue to external debt payments, while only 4.06% goes to health and 4.40% to education.

The international organization leveled accusations against the International Monetary Fund (IMF), asserting that its policy recommendations have undermined social spending and exacerbated economic difficulties. The report, titled “Still Cooking with a Failed Recipe: A Review of IMF Country Advice on Social Spending, Public Services, Debt, Tax and Gender Equality,” analyzed 29 IMF documents across 11 countries, including Nigeria, between February 2022 and February 2025.

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In 2025, seven of the eight African countries studied spent more on servicing their debts than on health – and six more than double. Only Ghana and Zimbabwe managed to spend more on education than they do on debt servicing. The scale of the debt burden relative to social spending is stark.

Across eight African nations studied, seven spent more on debt servicing than on health in 2025, with six spending more than double. Only Ghana and Zimbabwe managed to allocate more funds to education than to debt servicing. ActionAid highlighted that for most lower-income countries, debt has become the primary obstacle to increasing social spending and improving public services.

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The IMF did not connect debt to social spending. Across all eight African countries studied, no IMF document compared external debt payments against health or education spending or evaluated the policy trade-offs, despite debt servicing exceeding health spending in seven of the eight African countries.

The report criticizes the IMF for failing to link debt servicing with its implications for health and education budgets. It noted that across the eight African countries examined, no IMF document compared external debt payments against health or education spending, despite debt servicing exceeding health spending in most cases. Debt repayment was consistently treated as an immutable obligation, with social services expected to be funded only after creditors were paid.

Regarding Nigeria's fuel subsidy removal, the report acknowledged the IMF's role in recommending the policy but noted that compensatory measures for the poor were insufficient and untimely. This led to cost-of-living pressures that eventually prompted the government to reintroduce some form of subsidy. ActionAid also alleged that IMF policy advice to Nigeria remained largely unchanged, despite the institution's public commitments to social spending and gender equality.

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The IMF recommended in ArtIV24 that Nigeria remove its fuel subsidy. Adequate compensatory measures for the poor were not scaled up in a timely manner.