Nigeria has spent almost $3bn servicing Eurobond debt across eight quarters of President Bola Tinubu’s administration, highlighting the mounting cost of commercial borrowing on the nation’s finances. Fresh data from the Debt Management Office shows that from Q3 2023 to Q2 2025, Eurobond payments alone accounted for 31.5% of Nigeria’s total external debt servicing, amounting to $9.32bn within the same period. Analysts say the pattern paints a worrisome picture of a country leaning heavily on high-interest loans during a time of fiscal strain.
A deeper look at the numbers reveals that the bulk of these payments went to interest rather than principal. Out of the $2.93bn spent on Eurobond servicing, $2.43bn—or 83%—was interest, underscoring how expensive commercial debt has become for Nigeria. The heaviest burden fell in Q3 2023, Tinubu’s first full quarter in office, when Nigeria redeemed a maturing Eurobond with a combined $943.66m payment. That single quarter marked the highest Eurobond servicing share—67.8%—of total external debt costs during the period.
The cycle of rising interest payments continued through 2024 and 2025, driven largely by Nigeria’s clustered Eurobond coupon structure. Payments spiked again in Q3 2024 and Q1 2025, each hitting $427.72m, entirely for interest. Even quarters without principal redemptions saw large outflows, highlighting the persistent pressure Eurobond commitments place on the government’s limited fiscal space. As of June 2025, Nigeria’s Eurobond stock had risen to $17.32bn, showing an 11% increase in two years.
Despite the rising servicing burden, Nigeria has continued to tap international markets for fresh funding. In November, the government raised $2.35bn through a dual-tranche Eurobond that drew a record $13bn in investor bids—the largest order book in Nigeria’s history. Officials, including President Tinubu and Finance Minister Wale Edun, celebrated the oversubscription as a vote of confidence in Nigeria’s reform agenda, even as experts warn that such borrowings can deepen long-term repayment risks if not tied to productive investments.
Financial analysts remain divided on the implications. Some argue that Eurobonds offer quick access to capital without the strict conditions tied to multilateral loans, while others caution that high interest rates and currency risks could strain Nigeria’s finances in the long run. They warn that Nigeria’s heavy dependence on commercial borrowing mirrors the experiences of Ghana, Sri Lanka, and Kenya—countries that later faced severe debt distress. With over 83% of Eurobond servicing going to interest, analysts say Nigeria must strengthen its repayment capacity and ensure borrowed funds translate into real economic returns.
source: punch