- The Central Bank of Nigeria (CBN) has said that Nigeria spent over $5 billion on external debt servicing in 14 months
- The apex bank revealed that May 2024 witnessed the highest in external debt servicing at $854.37 million
- Analysts are worried about Nigeria’s debt burden and sustainability following dwindling revenue, depreciating external reserves
Legit.ng’s Pascal Oparada has reported on tech, energy, stocks, investment and the economy for over a decade.
Data from the Central Bank of Nigeria (CBN) shows that Nigeria spent $5.47 billion on external debt servicing between January 2024 and February 2025.
The amounts show Nigeria’s growing debt obligations and the pressure on the country’s external reserves and fiscal stability.
Credit: State House
Source: Facebook
Breakdown of external debt payments
A breakdown of the data shows that debt service payments remained unstable in the review period, with May 2024 recording the highest outflows at $854.37 million, while June 2024 experienced the lowest monthly payments at $50.82 million.
According to the analysis, the figures represent a 1.9% increase in debt service payments from $276.17 million in March 2024 to $283.22 million in February this year.
Interestingly, Nigeria’s external reserves declined by over $1 billion in February 2025, showing the debt service effects, a Legit.ng report said.
In April last year, the amount dropped by 22.1% to $215.20 million, before rising by 297% in May to $854.37 million, the highest monthly expenditure in the review period.
In June 2024, debt servicing dropped by 94% to $50.82 million, the lowest in 14 months.
The amount surged again in July 2024, increasing by $967.4% to $542.50 million, followed by a 48.4% decline in August 2024 to $279.95 million, before rising by 84.2% in September 2024 to $515.86 million.
In November last year, the amount declined by 54.9% to $232.50 million before rising again in December 2024 by 41.1% to $328.91 million.
According to reports, debt servicing rose again in January 2025 by 64.4% to $540.67 million, before crashing by 48.8% in February 2025 to $276.73%.
The debt servicing payments have continued to impact the nation’s forex reserves and the naira’s competitiveness in the FX markets.
Nigeria spends $5,47 billion on debt servicing
With the reported $5.47 billion spent on debt repayments in 14 months, there are worries over Nigeria’s debt sustainability and fiscal outlook.
Punch reports that in the 14 months, Nigeria spent about 63.66% of international payments on foreign debt services.
The total debt service costs, including external and domestic debts, increased in Q3 2024, reaching N3.57 trillion, a quarterly increase of N60 billion or 1.71% from N3.51 trillion in Q2.
Information from the Debt Management Office (DMO) shows that external debt service in the third quarter of 2024 was $1.34 billion, translating to N2.14 trillion at the exchange rate of N1,601 per dollar.
Nigeria’s debt servicing surges in naira terms
Relatively, the second quarter external debt service of $1.12 billion was estimated at N1.65 trillion at the exchange rate of N1,470.19 per dollar.
The figure shows a 29.70% spike in naira basis due to the local currency’s depreciation and a higher dollar obligation.
The DMO provided the exchange rate used for external debt servicing.
In dollar terms, Nigeria spent N1.34 billion on external debt service between July and September 2024, representing a 19.44% rise from the $1.12 billion in the previous quarter.
The increase in payments was due to higher debt to multilateral and bilateral creditors, and interest payments on commercial loans.
According to the nation’s debt managers, multilateral debt service payments remained the largest component, amounting to $712.66 million in the third quarter, from 6.04% at $672.01 million in the second quarter.
Nigeria’s top creditors
The figure accounted for 53.26% of the total external debt service payments caused by increases in principal repayments and interest charges.
CBN data shows that payments to the International Monetary Fund (IMF) rose marginally to $406.98 million from $404.24 million in the previous quarter.
Bilateral debt service rose quarterly by 325.52% at $186.92 million from $43.92 million in Q2.
Credit: State House.
Source: Facebook
The increase was due to payments to China’s Exim Bank, which rose to $182.04 million in Q3.
Other creditors include the Exim Bank of India and the French Development Agency, which increased in repayments.
Nigeria’s debt to World Bank to rise to $9.2bn under Tinubu
Legit.ng earlier reported that the Nigerian government is about to secure six new loans of about $2.23 billion from the World Bank in 2025 as the bank continues to support the country’s economic reforms.
According to data from the World Bank, the new borrowings will bring Nigeria’s total debt to the World Bank to $9.25 billion in three years, showing a continued dependence on external funding to support critical sectors of the economy.
A breakdown of Nigeria’s loan approvals from the global financial institution since 2023 under President Bola Tinubu shows a rising increase in funding commitments.
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Source: Legit.ng
