Nigeria’s Foreign Debt Hits $145bn as Debt Servicing Costs Surge – World Bank

Nigeria’s external debt rose to $145.015bn in 2025, representing a 6.6 per cent increase from the previous year, according to the World Bank’s International Debt Report 2026.  

The figure represents an increase of $61.8bn from the $83.213bn recorded in 2015, indicating a 74.3 per cent rise in the country’s external debt over the past decade.

The report showed that public and publicly guaranteed debt accounted for $62.4bn of Nigeria’s total external debt, while private nonguaranteed debt stood at $54.476bn. Short-term external debt accounted for a further $28.139bn.

A breakdown of public and publicly guaranteed external debt showed that multilateral creditors held the largest share at $31.365bn, followed by private creditors at $24.352bn and bilateral creditors at $6.683bn.

Among multilateral lenders, the World Bank’s International Development Association (IDA) accounted for $18.533bn, while the International Monetary Fund’s Special Drawing Rights allocations stood at $5.516bn.

China remained Nigeria’s largest bilateral creditor, with $5.672bn in outstanding debt, followed by France at $774m and other bilateral creditors at $237m.

Despite the increase in the country's external debt stock, two key debt indicators improved during the period. External debt as a proportion of exports declined by 4.3 per cent to 212 per cent, while the debt-to-Gross National Income ratio fell by 6.6 per cent to 51 per cent.

However, the cost of servicing the debt continued to rise. External debt service as a proportion of exports increased by 9.6 per cent to 19 per cent, while debt servicing relative to Gross National Income rose by 6.9 per cent to five per cent.

The World Bank reported that debt-service payments by low- and middle-income countries reached $1.4tn in 2025, marking the fifth consecutive year of increases. Payments rose by 1.9 per cent, largely driven by obligations to private creditors, particularly international bondholders.

Between 2022 and 2025, countries covered by the report paid approximately $436.1bn more in debt servicing than they received in new financing.

However, the trend reversed in 2025, as long-term debt flows recorded a net inflow of $45.4bn, compared with a net outflow of $118.4bn in 2024.

The report also highlighted the significant difference in borrowing costs between official and private creditors, with private financing carrying substantially higher interest rates.

New commitments from official creditors in 2025 attracted an average interest rate of 1.9 per cent, with a maturity period of 25 years and a five-year grace period.

In contrast, private creditors charged an average interest rate of 9.6 per cent, with a 12-year maturity period and an eight-year grace period, highlighting the higher cost of accessing private international financing.