Nigeria spent $2.86 billion on external debt servicing between January and August 2025, representing 69.1 per cent of the country’s total foreign payments of $4.14 billion, according to data released by the Central Bank of Nigeria (CBN) on Wednesday.
In the same period of 2024, debt servicing stood at $3.06 billion, accounting for 70.7 per cent of total foreign payments worth $4.33 billion. While the absolute value of debt service fell by $198 million in 2025 compared to 2024, the figures show that nearly seven out of every ten dollars leaving the country is still being channelled into debt obligations.
The monthly breakdown revealed fluctuations in repayment levels. In January 2025, Nigeria spent $540.67 million, slightly lower than $560.52 million in January 2024. February recorded $276.73 million, down from $283.22 million in the same month of 2024.
Debt service then spiked to $632.36 million in March 2025, more than double the $276.17 million spent in March 2024. In April, payments hit $557.79 million, up from $215.20 million a year earlier. May dropped sharply to $230.92 million compared to $854.37 million in May 2024, while June climbed to $143.39 million against $50.82 million the previous year.
July 2025 recorded $179.95 million, a steep decline from $542.5 million in July 2024. In August, debt service rose again to $302.3 million, slightly higher than the $279.95 million recorded in August 2024.
Month-on-month, the data highlighted the erratic nature of payments: a steep fall from $540.67 million in January to $276.73 million in February, followed by a sharp rise in March, then alternating declines and rebounds through August.
Despite a lower overall spend compared to 2024, debt service continues to dominate Nigeria’s foreign obligations, accounting for nearly three-quarters of total outflows. Analysts warn that this trend limits funds available for critical imports and investments.
Fitch Ratings recently projected that Nigeria’s external debt service would 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 agency noted that repayments are expected to fall to $3.5 billion in 2026.
Fitch also flagged concerns over fiscal management, citing a minor delay in a Eurobond coupon payment due on March 28, 2025. It warned that weak revenue mobilisation and high-interest costs could undermine debt sustainability, despite external debt levels remaining moderate.
The agency projected that general government debt would hover around 51 per cent of GDP in 2025 and 2026. However, it cautioned that Nigeria’s structurally low revenue-to-GDP ratio, estimated to average 13.3 per cent, will continue to push the interest-to-revenue burden above 30 per cent. For the Federal Government alone, interest payments are expected to consume nearly 50 per cent of revenues.
