Nigeria services external debt with 69.1% of total foreign payment

…cost slows to $2.86bn in eight months

Between January and August 2025, Nigeria spent a huge $2.86 billion servicing external debt.

The international payment data released by the Central Bank of Nigeria (CBN) on Wednesday shows that the figure represents 69.1 percent of the country’s total foreign payments of $4.14billion within the period.

The CBN data show that while the nominal debt service amount declined year-on-year, its share of overall foreign outflows remains persistently high, with nearly seven out of every ten dollars spent on debt obligations.

The official exchange rate is relatively stable as naira appreciated to N1,455.23/$ on Thursday, October 2. Nigeria’s gross external reserves as at September 29 was $42.326billion, an increase from $42.256billion as at September 26.

The eight months to August 2025 figure is $198million lower than that of 2024.

The CBN data show fluctuations in Nigeria’s monthly debt servicing profile. In January 2025 it was $540.67million, slightly lower than $560.52million in January 2024.

In February 2025 it was $276.73million, down from $283.22million in same period last year In March 2025, it was $632.36million, more than double the $276.17million paid in March 2024.

The country spent $3.06billion on debt servicing during the same period in 2024, amounting to 70.7 percent of total foreign payments of $4.33billion.

Debt service continues to dominate Nigeria’s foreign obligations, with about seven in every ten dollars paid abroad going to creditors rather than trade or investment.

In April 2025, it used $557.79million to service debt, up from $215.20million in April 2024. In May 2025, it was $230.92million, down from $854.37million in May 2024. In
June 2025, the country used $143.39million for debt service, almost triple the $50.82million in June 2024.

Also, in July 2025, $179.95million was used for debt service, compared with $542.5million in July 2024, while in August 2025 it was $302.3million, which is also above $279.95million same month in the previous year.

Fitch Ratings had projected Nigeria’s external debt service to rise further, from $4.7billion in 2024 to $5.2billion in 2025, including $4.5billion in amortisation payments and a $1.1billion Eurobond repayment due in November 2025. Debt service is expected to ease to $3.5billion in 2026.

Fitch also cautioned that while Nigeria’s debt service is still moderate by international standards, weak revenue mobilisation and high interest costs remain significant risks.

Fitch forecasts general government debt at about 51 percent of GDP in 2025–2026, with government revenues projected to average just 13.3 percent of GDP over the same period. Interest payments are expected to consume over 30 percent of total revenue, while for the Federal Government alone, the ratio is projected at nearly 50 percent.

Iheanyi Nwachukwu

Iheanyi Nwachukwu, is a creative content writer with over 18 years journalism experience writing on banking, finance and capital markets. The multiple awards winning journalist is Assistant Editor, BusinessDay. Iheanyi holds BSc Degree in Economics from Imo State University; Master of Science (MSc) Degree in Management from University of Lagos.
Iheanyi has attended several work-related trainings including (i) Advanced Writing and Reporting Skills (Pan African University, Lagos); (ii) News Agency Journalism (Indian Institute of Mass Communication {IIMC}, New Delhi, India); and (iii) Capital Markets Development and Regulations (International Law Institute {ILI} of Georgetown University, Washington DC, USA).