Nigeria spent $5.47 billion on external debt servicing between January 2024 and February 2025, highlighting ongoing fiscal pressures, according to data from the Central Bank of Nigeria.
Debt service payments fluctuated significantly, with the highest monthly payment of $854.37 million recorded in May 2024, while June saw the lowest at $50.82 million. By Q3 2024, external debt service costs had risen to $1.34 billion, a 19.44% increase from the previous quarter, driven by obligations to multilateral and bilateral creditors, including the International Monetary Fund and China’s Exim Bank.
The depreciation of the naira further compounded the country’s debt burden, with Q3 debt service payments translating to N2.14 trillion at an exchange rate of N1,601.03/$. The government has allocated N14.32 trillion for debt servicing in the 2025 budget, raising concerns about limited fiscal space for development projects.
President Bola Tinubu acknowledged the challenge, stating that his administration reduced Nigeria’s debt service ratio from 97% to 68% and is working to break the cycle of excessive borrowing. Experts, however, warn that heavy debt servicing drains resources without yielding tangible economic benefits, urging better fiscal management to prevent further strain on public finances.
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