Nigeria spent a total of $2.86 billion servicing external debt in the first eight months of 2025, according to the international payment data from the Central Bank of Nigeria (CBN) on Wednesday. This accounted for 69.1 per cent of the country’s total foreign payments of $4.14 billion in the period.
In the same eight-month stretch of 2024, debt service stood at $3.06 billion, representing 70.7 per cent of total foreign payments of $4.33 billion. The figures show that while the absolute value of debt service fell by $198 million between 2024 and 2025, the share of debt in overall foreign payments has remained persistently high, with about seven out of every ten dollars leaving the country used to meet debt obligations.
The monthly breakdown highlights the volatility of Nigeria’s repayment schedule. In January 2025, $540.67 million was spent compared with $560.52 million in January 2024, a fall of $19.85 million or 3.5 per cent. February 2025 recorded $276.73 million, slightly below the $283.22 million in February 2024, down by $6.49 million or 2.3 per cent.
March 2025 surged to $632.36 million against $276.17 million in March 2024, an increase of $356.19 million or 129 per cent. In April 2025, payments reached $557.79 million, which was $342.59 million or 159 per cent higher than the $215.20 million of April 2024.
May 2025 stood at $230.92 million, sharply lower than the $854.37 million in May 2024, a drop of $623.45 million or 73 per cent. June 2025 rose to $143.39 million compared with $50.82 million in June 2024, a rise of $92.57 million or 182 per cent.
July 2025 fell to $179.95 million, down by $362.55 million or 66.8 per cent from $542.5 million and in July 2024. By August 2025, debt service climbed to $302.3 million, which was $22.35 million or 8 per cent higher than the $279.95 million of August 2024.
Month-on-month trends in 2025 further underline the erratic nature of the payments. The country began January with $540.67 million, which dropped by $263.94 million or 48.8 per cent to $276.73 million in February.
March then spiked to $632.36 million, up by $355.63 million or 128.5 per cent. April fell to $557.79 million, down by $74.57 m or 11.8 per cent from March. May dropped to $230.92 million, down by $326.87 million or 58.6 per cent. June slipped further to $143.39 million, a decline of $87.52 million or 37.9 per cent.
July rebounded slightly to $179.95 million, an increase of $36.56 million or 25.5 per cent, before August rose again to $302.3 million, which was $122.35 million or 67.9 per cent higher than July.
The dominance of debt service in Nigeria’s foreign obligations is clear. In the eight months of 2025, $2.86 billion of the $4.14 billion total foreign payments went to debt, giving it a share of 69.1 per cent. A year earlier, $3.06 billion of the $4.33 billion total foreign payments went to debt, accounting for 70.7 per cent.
These figures show that, despite spending nearly $200 million less on debt this year compared to 2024, debt still accounted for the overwhelming majority of foreign exchange outflows.
This high ratio of debt service to total foreign payments highlights Nigeria’s vulnerability, as nearly three-quarters of its international outflows are being channelled into debt repayment rather than critical imports or investments.
Fitch Ratings recently noted that Nigeria’s external debt service will increase from $4.7 billion in 2024 to $5.2 billion in 2025. This includes $4.5 billion in amortisation payments and a $1.1 billion Eurobond repayment due in November. Fitch noted, ‘Government external debt service is moderate but expected to rise to $5.2 billion in 2025 (with $4.5 billion of amortisations, including a $1.1 billion Eurobond repayment due in November 2025), from $4.7 billion in 2024, and fall to $3.5 billion in 2026’.
The agency also cited a minor delay in the payment of a Eurobond coupon due on 28 March 2025, as a reflection of persistent challenges in public finance management. Although Nigeria’s external debt service remains within manageable levels, Fitch warned that high-interest costs, weak revenue performance, and limited fiscal space remain significant concerns.
Fitch said general government debt was expected to remain at about 51 per cent of GDP in 2025 and 2026. However, it expressed concern over the government’s revenue position, noting that interest payments will consume a substantial portion of income.
It stated, ‘We expect general government revenue-to-GDP to rise but to remain structurally low (averaging 13.3 per cent in 2025–2026), largely accounting for a high general government interest/revenue ratio, above 30 per cent, with the Federal Government interest/revenue ratio of nearly 50 per cent’.
