Nigeria spent a total of $2.86bn servicing external debt in the first eight months of 2025, according to the international payment data from the Central Bank of Nigeria. This accounted for 69.1 per cent of the country’s total foreign payments of $4.14bn in the period.
In the same eight-month stretch of 2024, debt service stood at $3.06bn, representing 70.7 per cent of total foreign payments of $4.33bn. The figures show that while the absolute value of debt service fell by $198m between 2024 and 2025, the share of debt in overall foreign payments has remained persistently high, with about seven out of every ten dollars leaving the country used to meet debt obligations.
The dominance of debt service in Nigeria’s foreign obligations is clear. In the eight months of 2025, $2.86bn of the $4.14bn total foreign payments went to debt, giving it a share of 69.1 per cent. A year earlier, $3.06bn of the $4.33bn total foreign payments went to debt, accounting for 70.7 per cent.
These figures show that, despite spending nearly $200 million less on debt this year compared to 2024, debt still accounted for the overwhelming majority of foreign exchange outflows.
This high ratio of debt service to total foreign payments highlights Nigeria’s vulnerability, as nearly three-quarters of its international outflows are being channelled into debt repayment rather than critical imports or investments.
Fitch Ratings recently noted that Nigeria’s external debt service will increase from $4.7bn in 2024 to $5.2bn in 2025. This includes $4.5bn in amortization payments and a $1.1bn Eurobond repayment due in November. Fitch noted, “Government external debt service is moderate but expected to rise to $5.2bn in 2025 (with $4.5bn of amortizations, including a $1.1bn Eurobond repayment due in November 2025), from $4.7bn in 2024, and fall to $3.5bn in 2026.”
The agency also cited a minor delay in the payment of a Eurobond coupon due on March 28, 2025, as a reflection of persistent challenges in public finance management. Although Nigeria’s external debt service remains within manageable levels, Fitch warned that high-interest costs, weak revenue performance, and limited fiscal space remain significant concerns.
Fitch said general government debt was expected to remain at about 51 per cent of GDP in 2025 and 2026. However, it expressed concern over the government’s revenue position, noting that interest payments will consume a substantial portion of income.
It stated, “We expect general government revenue-to-GDP to rise but to remain structurally low (averaging 13.3 per cent in 2025–2026), largely accounting for a high general government interest/revenue ratio, above 30 per cent, with the Federal Government interest/revenue ratio of nearly 50 per cent.
Punch/Halima Abdulganiyu
