Nigeria allocated $2.86 billion to service its external debt from January to August 2025, according to data released by the Central Bank of Nigeria (CBN) on Wednesday. This amount represents 69.1% of the country’s total foreign payments of $4.14 billion during the period.
In comparison, Nigeria spent $3.06 billion on debt servicing in the first eight months of 2024, accounting for 70.7% of the $4.33 billion in total foreign payments. While debt servicing costs decreased by approximately $198 million year-on-year, debt obligations continue to consume a significant portion of Nigeria’s foreign exchange outflows, with nearly seven out of every ten dollars directed toward repayments.
The CBN’s monthly data reveals significant fluctuations in Nigeria’s debt repayment schedule. In January 2025, debt servicing totaled $540.67 million, a slight 3.5% decrease from $560.52 million in January 2024. February 2025 saw payments of $276.73 million, marginally lower than the $283.22 million recorded in February 2024. However, March 2025 payments surged to $632.36 million, a 129% increase from $276.17 million in March 2024.
April 2025 recorded $557.79 million in debt servicing, up 159% from $215.20 million in April 2024. In contrast, May 2025 saw a sharp decline to $230.92 million, down 73% from $854.37 million in May 2024. June 2025 payments rose to $143.39 million, a 182% increase from $50.82 million in June 2024. July 2025 dropped to $179.95 million, a 66.8% decrease from $542.50 million in July 2024, while August 2025 climbed to $302.30 million, up 8% from $279.95 million in August 2024.
Month-on-month trends in 2025 further highlight the volatility. Payments fell by 48.8% from January to February, surged by 128.5% in March, and then declined by 11.8% in April. May saw a 58.6% drop, followed by a further 37.9% decrease in June. July recorded a 25.5% increase, and August saw a 67.9% rise compared to July.
The heavy burden of debt servicing underscores Nigeria’s economic challenges, as a significant share of foreign exchange is diverted from critical imports or investments. According to Fitch Ratings, Nigeria’s external debt servicing is projected to rise to $5.2 billion in 2025, including $4.5 billion in amortizations and a $1.1 billion Eurobond repayment due in November, up from $4.7 billion in 2024. The agency anticipates a decline to $3.5 billion in 2026.
Fitch also highlighted concerns about Nigeria’s fiscal health, noting a minor delay in a Eurobond coupon payment due on March 28, 2025, which reflects ongoing public finance management issues. While external debt servicing remains manageable, high interest costs and weak revenue performance pose risks. The agency projects general government debt to stabilize at around 51% of GDP in 2025 and 2026, but interest payments are expected to consume over 30% of government revenue, with the federal government’s interest-to-revenue ratio nearing 50%.
