By DAYO ADESULU
Nigeria spent $2.86 billion servicing external debt between January and August 2025, representing 69.1% of total foreign payments of $4.14 billion, according to new data released by the Central Bank of Nigeria (CBN) on Wednesday.
The figure is slightly lower than the $3.06 billion paid in the same period of 2024, which accounted for 70.7% of total foreign payments of $4.33 billion. Despite the $198 million decline year-on-year, debt service continues to dominate Nigeria’s external obligations, with nearly seven in every 10 dollars leaving the country used to settle debt.
Volatile Monthly Payments
- January 2025: $540.67m (↓3.5% from 2024)
- February 2025: $276.73m (↓2.3%)
- March 2025: $632.36m (↑129%)
- April 2025: $557.79m (↑159%)
- May 2025: $230.92m (↓73%)
- June 2025: $143.39m (↑182%)
- July 2025: $179.95m (↓66.8%)
- August 2025: $302.3m (↑8%)
The data reveals sharp swings month-to-month, with payments surging in March and April but plunging in May and June before climbing again in July and August.
Debt Burden Remains Heavy
While overall payments fell this year, the proportion of debt service to foreign outflows remains stubbornly high, limiting resources for imports and investments.
Fitch Ratings recently projected that Nigeria’s external debt service will rise from $4.7bn in 2024 to $5.2bn in 2025, including $4.5bn in amortisation and a $1.1bn Eurobond repayment due in November 2025. The figure is expected to fall to $3.5bn in 2026.
Fitch also flagged concerns about:
- Weak revenue performance
- High interest costs
- Narrow fiscal space
- A delayed Eurobond coupon payment in March 2025
Government debt is forecast to remain around 51% of GDP through 2026, but interest payments are projected to consume nearly 50% of federal revenue.
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