Nigeria Spends $2.86bn on Debt Servicing in Eight Months, CBN Data Reveals
Nigeria has spent a staggering $2.86 billion servicing external debt between January and August 2025, according to new figures from the Central Bank of Nigeria (CBN). This accounted for 69.1 percent of the country’s total foreign payments of $4.14 billion during the period. The data underscores how debt servicing continues to dominate Nigeria’s financial outflows, leaving less room for investment and critical imports.
Compared with the same period in 2024, when the country spent $3.06 billion on debt servicing out of $4.33 billion in total foreign payments, this year’s figure represents a $198 million drop. However, the share of debt servicing remained stubbornly high—about seven in every ten dollars leaving Nigeria still goes to creditors. Economists say this persistent burden highlights the country’s fiscal vulnerability despite slight improvements in repayment values.
Monthly figures reveal sharp swings in the repayment schedule. For instance, debt payments spiked to $632.36 million in March 2025, more than double the $276.17 million recorded in March 2024. April also saw a surge at $557.79 million, up 159 percent year-on-year. Yet, May brought some relief, dropping to $230.92 million compared to the massive $854.37 million in May 2024. This volatility shows how unpredictable Nigeria’s repayment obligations can be, often straining forex reserves and government planning.
The heavy debt service load also poses risks for economic growth. Fitch Ratings recently projected Nigeria’s external debt service to rise to $5.2 billion in 2025, including a $1.1 billion Eurobond repayment due in November. While the agency noted debt levels remain “moderate,” it warned of serious concerns about Nigeria’s weak revenue base, high-interest costs, and limited fiscal space. With interest payments expected to consume nearly half of the Federal Government’s revenue, fiscal sustainability remains under pressure.
Experts warn that unless Nigeria boosts its revenue-to-GDP ratio—currently forecast at just 13.3 percent for 2025–2026—the country risks sinking deeper into a debt trap. For everyday Nigerians, this means fewer funds available for infrastructure, healthcare, and job-creating investments, as billions are diverted abroad to settle debt obligations. Analysts are urging the government to step up reforms that expand revenue sources, strengthen fiscal management, and reduce dependency on external borrowing.
source: punch