Nigeria spent $2.86 billion servicing external debt between January and August 2025, according to data released by the Central Bank of Nigeria (CBN) on Wednesday. This figure accounted for 69.1% of the country’s total foreign payments of $4.14 billion within the period.
By comparison, debt servicing during the same period in 2024 stood at $3.06 billion, representing 70.7% of the $4.33 billion in total foreign payments. While the country managed to reduce its debt service burden by $198 million in absolute terms year-on-year, the share of debt in its foreign obligations has remained persistently high, with nearly seven out of every ten dollars leaving the country going toward debt repayment.
CBN’s monthly data underscores the erratic nature of Nigeria’s repayment schedule. Payments fluctuated sharply throughout the year. For instance, March and April 2025 saw significant spikes compared to the same months in 2024, while months like May and July recorded steep declines. The trend within 2025 itself was equally unstable, with January beginning at over half a billion dollars, falling significantly in February, surging again in March, and dropping once more in subsequent months before climbing back up by August.
This inconsistency reflects the volatility in Nigeria’s debt obligations and raises concerns about planning and predictability in managing foreign payments. Despite the decline in the total amount paid compared to the previous year, the dominance of debt service in Nigeria’s foreign exchange outflows remains a major red flag for the country’s economic stability.
Fitch Ratings recently projected that Nigeria’s external debt service will rise to $5.2 billion by the end of 2025, up from $4.7 billion in 2024. This includes $4.5 billion in amortisation and a $1.1 billion Eurobond repayment due in November. The agency also highlighted a slight delay in the payment of a Eurobond coupon in March 2025 as a signal of continued challenges in managing public finances.
Though Fitch considers Nigeria’s external debt service manageable, it warned that high interest costs, low revenue, and limited fiscal space remain pressing issues. The agency expects government debt to hover around 51% of GDP through 2025 and 2026. However, it expressed concern about the country’s structurally low revenue, estimating the general government revenue-to-GDP ratio will average just 13.3% over the two years. This means interest payments could consume over 30% of all government revenue, and nearly half of the Federal Government’s income—highlighting Nigeria’s growing fiscal vulnerability despite relative debt stability.
