By Emmanuella Opara | November 7th 2026
KEY POINTS
- Nigeria owed China $5.67bn in bilateral loans at the end of 2025, representing about 85 per cent of its $6.68bn bilateral external debt.
- The country’s total external debt increased by 6.6 per cent to $145.02bn in 2025.
- Multilateral creditors accounted for $31.37bn of Nigeria’s public and publicly guaranteed external debt.
- President Bola Tinubu is seeking legislative approval to borrow an additional $7.7bn from external sources to finance part of the 2026 budget deficit.
MAIN STORY
China accounted for approximately 85 per cent of Nigeria’s bilateral external debt at the end of 2025, with the country owing the Asian economic powerhouse $5.67bn, according to the World Bank.
The figure makes China Nigeria’s largest bilateral creditor, ahead of France, which was owed $774m, while other bilateral lenders accounted for the remaining $237m.
The World Bank disclosed this in its International Debt Report 2026, published on Friday, which also showed that Nigeria’s total external debt rose by 6.6 per cent from $136.05bn in 2024 to $145.02bn in 2025.
Nigeria’s bilateral obligations stood at $6.68bn, forming part of its $62.4bn public and publicly guaranteed external debt. This category covers direct government borrowing as well as loans obtained by other entities with government guarantees.
Multilateral institutions accounted for the largest portion of the publicly guaranteed external debt, with outstanding obligations of $31.37bn, while private creditors held $24.35bn.
Within the multilateral category, the World Bank’s International Development Association accounted for $18.53bn, followed by the International Monetary Fund’s Special Drawing Rights allocations at $5.52bn. Other multilateral institutions held $7.32bn.
The report also showed that Nigeria’s total external debt increased from $83.21bn in 2015 to $145.02bn in 2025, representing a growth of approximately 74.3 per cent over the decade.
Of the total external debt, $54.48bn represented private nonguaranteed borrowing, while short-term external obligations stood at $28.14bn.
The increase in external debt comes as the Federal Government seeks additional financing to support the 2026 budget.
President Bola Tinubu has requested National Assembly approval to raise $7.707bn, equivalent to approximately N10.79tn, from international financing sources to partly fund the budget deficit.
In a letter read by Senate President Godswill Akpabio during plenary on Wednesday, the President explained that the proposed external borrowing formed part of the N29.2tn new borrowing provision in the 2026 Appropriation Act.
The borrowing plan comprises N18.4tn in domestic financing and N10.79tn in external financing, based on the budget exchange rate of N1,400 to the dollar.
On debt sustainability, the World Bank reported that Nigeria’s external debt-to-exports ratio stood at 212 per cent in 2025, while external debt-to-Gross National Income was 51 per cent.
The country’s debt service-to-exports ratio reached 19 per cent, while debt service-to-GNI stood at five per cent.
The report further showed differences in the cost of new external borrowing, with Nigeria recording an average interest rate of 1.9 per cent on new loan commitments from official creditors, compared with 9.6 per cent for private creditors.
World Bank Group Chief Statistician and Director of Development Data, Haishan Fu, said the growing reliance on private lending was increasing borrowing costs for developing economies.
“The return of private lending to low- and middle-income countries is welcome, but these countries are borrowing more, paying more, and in many cases leaving less for long-term development,” Fu said.
He added that responsible debt management was necessary to ensure that future generations also benefited from available economic resources.
THE ISSUES
Nigeria’s rising external debt reflects its continued reliance on foreign financing to support government expenditure and meet budgetary obligations.
China’s position as the country’s largest bilateral creditor also highlights the concentration of Nigeria’s government-to-government borrowing among a relatively small number of lenders.
However, bilateral loans represent only one component of the country’s external obligations. Multilateral institutions and private creditors account for substantially larger portions of its public and publicly guaranteed external debt.
The World Bank’s debt indicators also draw attention to the relationship between external borrowing and the country’s capacity to generate foreign exchange. With external debt equivalent to 212 per cent of exports, debt repayment obligations remain an important consideration for the country’s external financing position.
The difference between borrowing costs from official and private creditors further illustrates the financial implications of the sources Nigeria chooses when seeking additional external financing.
WHAT’S BEING SAID
“The return of private lending to low- and middle-income countries is welcome, but these countries are borrowing more, paying more, and in many cases leaving less for long-term development,” Haishan Fu, World Bank Group Chief Statistician and Director of Development Data, said.
WHAT’S NEXT
The National Assembly is expected to consider President Tinubu’s request for approval to raise $7.707bn in external financing as part of the government’s 2026 borrowing programme.
The implementation of the borrowing plan and the management of existing debt obligations will remain important to Nigeria’s fiscal position.
BOTTOM LINE
Nigeria’s $5.67bn debt to China forms the largest share of its bilateral external obligations, but the broader concern is the increase in total external debt to $145.02bn. With the Federal Government seeking additional foreign financing, borrowing costs, export earnings and debt servicing capacity remain central to the country’s debt sustainability.
