Nigeria’s external debt climbed to nearly US$52 billion at the end of 2025, driven by fresh borrowing through eurobond issuances and syndicated loans, according to official data released Wednesday.
Figures from the Debt Management Office showed that Africa’s most populous nation’s foreign debt stock rose to US$51.86 billion in December, up from US$45.8 billion a year earlier.
The increase underscores Nigeria’s continued reliance on both domestic and external borrowing to finance budget deficits, amid persistent revenue constraints and rising fiscal pressures.
Debt servicing remains a major burden for the government, with authorities projecting that repayments will consume around 30 percent of the national budget this year.
The data highlighted a rise in Nigeria’s eurobond obligations, which climbed to $18.55 billion at the end of 2025, compared with US$17.3 billion the previous year.
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Eurobonds — debt securities issued on international markets — have been a key funding source for Nigeria, allowing it to access foreign capital but also exposing it to exchange rate and refinancing risks.
Bilateral and multilateral loans also continued to form a significant share of the country’s external debt profile.
Nigeria’s debt to China, its largest bilateral creditor, increased to US$5.5 billion, up from $5.2 billion a year earlier, reflecting ongoing financing for infrastructure and development projects.
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Meanwhile, the country’s exposure to the World Bank stood at US$24 billion, making it the single largest multilateral lender to Nigeria.
The rising debt levels come as the government grapples with a challenging economic environment marked by currency pressures, elevated inflation and the need to boost public spending.
Analysts say Nigeria’s dependence on external borrowing has grown in recent years due to limited domestic revenue mobilisation and structural fiscal deficits.
Oil revenues, traditionally the backbone of government income, have been volatile, while non-oil revenue collection has struggled to keep pace with spending needs.
As a result, borrowing has become a key tool for financing infrastructure, social programmes and other public expenditures.
However, the increase in foreign debt also raises concerns about sustainability, particularly as debt servicing costs continue to climb.
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According to the DMO, Nigeria spent US$5.2 billion servicing its external debt in 2025, highlighting the growing strain on public finances.
Higher global interest rates and a stronger dollar have further complicated the outlook, increasing the cost of borrowing and repayments for countries with significant external liabilities.
Economists warn that while Nigeria’s overall debt levels remain manageable relative to the size of its economy, the rising share of revenue devoted to servicing debt could limit fiscal space for development spending.
The government has in recent years sought to rebalance its debt mix by increasing domestic borrowing, but external financing remains crucial for funding large-scale projects and maintaining foreign exchange liquidity.
Efforts to improve revenue collection, broaden the tax base and attract foreign investment are seen as essential to easing reliance on debt over the medium term.
For now, however, Nigeria continues to walk a fine line between financing its development needs and managing a growing debt burden in an increasingly uncertain global economic climate.
