Nigeria’s external financing profile continues to draw scrutiny after fresh data revealed that the Federal Government channelled approximately $2.93bn toward Eurobond servicing across eight consecutive quarters under President Bola Tinubu’s administration.
The figures, sourced from the Debt Management Office’s (DMO) external debt-service database, highlight the growing weight of commercial borrowing on the national balance sheet. The report, which covers the period from Q3 2023 to Q2 2025, indicates that Eurobond-related payments alone represented 31.5 per cent of the country’s total foreign-debt servicing obligations of $9.32bn during the two-year span.
One of the most significant revelations is the composition of these payments: interest charges accounted for $2.43bn, or 83 per cent, of the total Eurobond servicing outlay. This means only a fraction went toward paying down the actual debt, underscoring the steep cost of Nigeria’s dependence on high-interest commercial notes.
The data suggests that the country will continue to contend with heavy debt-service commitments for years to come, given the structure and pricing of previous borrowings.
President Tinubu, who assumed office in May 2023, oversaw his administration’s first full debt-servicing cycle in Q3 2023, which was also the most expensive. That quarter, Nigeria settled $943.66m in Eurobond liabilities, including $500m in principal repayment and $443.66m in interest. With total external-debt servicing standing at $1.39bn for the quarter, Eurobonds constituted 67.8 per cent of the entire foreign-debt bill—still the highest proportion recorded since Tinubu came into office.
Eurobond servicing dipped in Q4 2023, since no principal payments were due, leaving the government to remit $148.57m strictly in interest. Despite external-debt servicing totalling $943.17m that quarter, Eurobonds represented a more modest 15.8 per cent.
A rebound followed in Q1 2024, with interest payments climbing to $282.57m, giving Eurobonds a 25.2 per cent share of the total servicing cost of $1.12bn. The upward trend continued in Q2 2024, where Eurobond interest reached $293.73m, accounting for 26.2 per cent of external-debt servicing.
The most notable jump occurred in Q3 2024, a period historically associated with heavy coupon outflows due to Nigeria’s bond structure. Eurobond interest payments surged to $427.72m, representing 31.9 per cent of the total foreign-debt servicing of $1.34bn for the quarter.
By Q4 2024, the pattern mirrored the previous year, with Eurobond servicing cooling to $148.57m, which equated to 13.8 per cent of the total servicing figure of $1.08bn—the lowest share in the two-year dataset.
However, this relief was brief. In Q1 2025, Eurobond servicing again reached $427.72m, matching Q3 2024 levels and amounting to 30.7 per cent of the quarter’s $1.39bn foreign-debt repayment bill. The most recent quarter, Q2 2025, recorded Eurobond servicing of $260.07m—all interest—representing 27.9 per cent of the $932.10m spent on external debts.
Overall, of the $2.93bn expended on Eurobond servicing, only $500m contributed toward reducing Nigeria’s outstanding Eurobond stock. The remaining $2.43bn went strictly to interest obligations.
The DMO data also shows that Nigeria’s Eurobond stock rose from $15.62bn in June 2023 to $17.32bn in June 2025, an increase of $1.70bn—equivalent to 10.88 per cent growth—indicating the country’s deepening exposure to costly commercial debt. Eurobonds now represent 36.86 per cent of the nation’s total external-debt portfolio.
In September, the Federal Executive Council endorsed plans to raise $2.3bn through Eurobond sales as part of the government’s 2024–2025 borrowing programme, alongside an additional $1.1bn for refinancing maturing debts. The National Assembly subsequently approved the plan.
By November, the government had secured $2.35bn from global investors through a dual-tranche Eurobond issuance. The offering—featuring 10-year and 20-year notes with yields of 8.63 per cent and 9.13 per cent respectively—attracted a record $13bn order book, making it Nigeria’s largest yet in international capital markets.
According to the DMO, the issuance saw strong participation from investors across major financial hubs including Europe, North America, the Middle East, and Asia. The bonds are scheduled to be listed on the London Stock Exchange, FMDQ Securities Exchange, and the Nigerian Exchange Limited.
President Tinubu hailed the oversubscription as evidence of robust investor confidence in Nigeria’s reform trajectory. Minister of Finance and Coordinating Minister of the Economy, Wale Edun, echoed this sentiment, describing the outcome as a validation of the government’s economic direction.
DMO Director-General, Patience Oniha, stated that Nigeria’s return to the Eurobond market aligned with its long-term financing strategy to support growth while reducing short-term borrowing pressures.
The proceeds from the issuance are earmarked for the 2025 budget deficit and other government financing requirements. The transaction was arranged by a consortium of global investment banks including Citi, Goldman Sachs, J.P. Morgan, and Standard Chartered.
Analysts say the issuance could help lift Nigeria’s foreign reserves, with CardinalStone projecting a rise to $45bn by end-2025. However, the firm estimates that total debt could reach N166.7tn—about 42.2 per cent of GDP—raising concerns about long-term debt sustainability.
Comercio Partners described the Eurobond issuance as a “positive fiscal signal,” but cautioned that the benefits could be eroded if currency stability falters.
Financial experts remain divided
Olatunde Amolegbe, CEO of Arthur Stevens Asset Management, said Eurobonds offer speed and fewer conditions compared to multilateral loans. He added that borrowing is manageable as long as funds are deployed prudently and repayment is consistent.
Economist Adewale Abimbola said Nigeria’s repayment history and investor confidence mitigate concerns, arguing that Eurobonds remain viable when exchange-rate risks are properly managed.
Research analyst Dayo Adenubi, however, warned that Eurobonds defer principal risk to maturity, increasing the likelihood of serial refinancing—especially when project returns underperform. He referenced Ghana, Sri Lanka, and Kenya as cautionary examples of countries that faced distress after overleveraging on commercial debt.
