Nigeria spent a total of $2.86 billion servicing external debt in the first eight months of 2025, according to international payments data released by the Central Bank of Nigeria (CBN). The figure accounted for 69.1% of the country’s total foreign payments of $4.14 billion within the period.
Comparatively, in the same eight-month stretch of 2024, debt service obligations stood at $3.06 billion—70.7% of $4.33 billion in total foreign payments. While debt service fell by $198 million year-on-year, its share of overall foreign outflows has remained persistently high, with about seven out of every ten dollars leaving Nigeria spent on debt repayments.
Volatile Repayment Trend
The repayment schedule in 2025 showed sharp fluctuations. Debt service stood at $540.67 million in January, dropped to $276.73 million in February, and then spiked to $632.36 million in March. April recorded $557.79 million, before plunging to $230.92 million in May and further to $143.39 million in June. Payments slightly recovered to $179.95 million in July and rose again to $302.3 million in August.
Compared with 2024, March and April 2025 posted significant increases—up 129% and 159% respectively—while May and July saw steep declines of 73% and 67%.
Debt Dominates FX Outflows
Overall, debt servicing remained the dominant component of Nigeria’s foreign obligations. In 2025, $2.86 billion out of $4.14 billion went to debt repayment, compared to $3.06 billion out of $4.33 billion in 2024.
Analysts warn this trend highlights Nigeria’s vulnerability, as nearly three-quarters of foreign exchange outflows are being channelled into debt servicing rather than imports or productive investments.
Fitch Outlook
Fitch Ratings projects Nigeria’s external debt service will rise from $4.7 billion in 2024 to $5.2 billion in 2025, including $4.5 billion in amortisation and a $1.1 billion Eurobond repayment due in November. The figure is expected to ease to $3.5 billion in 2026.
The rating agency noted a minor delay in Nigeria’s Eurobond coupon payment in March 2025, citing weak revenue mobilisation and fiscal pressures. Fitch warned that despite general government debt being stable at around 51% of GDP in 2025–2026, high interest costs and structurally low revenues remain risks.
Government revenue is projected to average 13.3% of GDP in 2025–2026, with interest payments consuming over 30% of total income and the Federal Government’s ratio nearing 50%.
