Nigeria has spent $2.01 billion on external debt servicing between January and April 2025, a 50% increase compared to the $1.33 billion recorded during the same period last year, according to the Central Bank of Nigeria’s latest data.
The payments accounted for over 77% of Nigeria’s total international financial outflows for the four-month period, up from 64.5% in 2024. In total, international payments—including remittances and letters of credit—stood at $2.6 billion, up from $2.07 billion a year earlier.
This sharp rise in debt repayments has placed additional pressure on Nigeria’s foreign exchange reserves, which reportedly dropped by about $3 billion during the review period.
A breakdown of the figures shows that debt servicing was relatively stable in January and February but surged in March and April. In March alone, the country paid $632.36 million—more than double the amount recorded in March 2024. April followed with $557.79 million, up 159% from the previous year.
The spike is linked to the full repayment of a $3.4 billion loan from the International Monetary Fund (IMF) under the Rapid Financing Instrument. The loan, secured in April 2020 to cushion the effects of the COVID-19 pandemic, was fully repaid by April 30, 2025.
Although the principal has been cleared, Nigeria will continue to make annual payments of around $30 million due to Special Drawing Rights (SDR) charges, the IMF confirmed. These charges are linked to the difference between Nigeria’s SDR holdings and its total allocation, with payments continuing until the gap is closed.
In 2024, Nigeria’s external debt service to the IMF reached $1.63 billion. Total debt service to all creditors stood at $4.66 billion in 2024, up from $3.5 billion in 2023. Multilateral creditors, particularly the IMF, accounted for the bulk of those payments.
Looking ahead, Fitch Ratings projects Nigeria’s external debt obligations will increase to $5.2 billion in 2025, including a $1.1 billion Eurobond maturity in November. While Fitch described Nigeria’s external debt as moderate, it warned that rising interest costs, revenue shortfalls, and limited fiscal space pose serious challenges.
The agency also highlighted ongoing concerns about Nigeria’s fiscal management, pointing to a recent delay in a Eurobond coupon payment as evidence of liquidity pressures.
Despite manageable debt-to-GDP ratios—forecast to hover around 51% in 2025 and 2026—Fitch cautioned that a significant portion of government revenue is being consumed by interest payments, raising sustainability concerns for the medium term.
