Nigeria spent over $2.01 billion on exterior debt servicing between January and April 2025, marking a 50% leap in comparison with the identical interval in 2024.
The Central Bank of Nigeria’s (CBN) worldwide funds knowledge on its web site exhibits that debt service prices now account for greater than three-quarters of the nation’s whole international outflows.
This growth highlights the mounting stress Nigeria faces in managing its exterior obligations amid persistent international alternate challenges and a fragile income base.
Debt service dominates FX outflows
- In response to the CBN report, whole worldwide funds, together with debt servicing, remittances, and letters of credit score, stood at $2.60 billion within the first 4 months of 2025.
- Out of this, debt service alone accounted for $2.01 billion, or 77.1% of whole funds. Against this, in the identical interval final 12 months, debt service prices have been $1.33 billion, about 64.5% of the entire $2.07 billion FX outflows.
- This rising share of debt funds means that Nigeria is spending extra of its FX reserves, which depleted by about $3 billion inside the four-month interval, settling previous loans.
March, April see sharp spikes
- A deeper have a look at the month-on-month knowledge paints a worrying image. In January 2025, debt servicing stood at $540.67 million, barely beneath the $560.52 million recorded in January 2024. February additionally maintained some stability, with funds totalling $276.73 million, simply shy of the $283.22 million determine from the earlier 12 months.
- However from March, the curve steepened. Nigeria paid $632.36 million in debt service that month, greater than double the $276.17 million paid in March 2024. The pattern continued in April with one other $557.79 million disbursed, up an enormous 159% from the $215.20 million recorded in April 2024.
- In simply two months, March and April, Nigeria paid practically $1.2 billion, suggesting the presence of huge mortgage repayments.
What you need to know
The rising price of debt service is crowding out different important FX calls for. With over 77 cents out of each greenback Nigeria spends overseas now going to service debt, there’s restricted fiscal area for productive exterior investments and even fundamental commerce transactions.
This pattern additionally raises questions in regards to the construction of Nigeria’s exterior debt. The back-loaded nature of some loans and growing reliance on international borrowing could also be pushing up near-term reimbursement obligations.
Nairametrics earlier reported that the Worldwide Financial Fund (IMF) confirmed that Nigeria absolutely repaid the $3.4 billion monetary assist it obtained beneath the Fast Financing Instrument (RFI) to cushion the financial impacts of the COVID-19 pandemic.
“As of April 30, 2025, Nigeria has absolutely repaid the monetary assist of about US$3.4 billion it requested and obtained in April 2020 from the Worldwide Financial Fund (IMF) beneath the Fast Financing Instrument to assist alleviate the affect of the COVID-19 pandemic and the sharp fall in oil costs,” the IMF acknowledged.
The Fund famous that regardless of the total settlement of the principal, Nigeria will proceed to honour further annual funds associated to Particular Drawing Rights (SDR) fees.
It clarified that Nigeria would proceed to make annual funds of roughly $30 million in SDR-related fees over the subsequent few years. These fees stem from the distinction between Nigeria’s SDR holdings and its cumulative SDR allocation.
Earlier experiences confirmed that debt servicing to the IMF surged to $1.63 billion in 2024, made up fully of principal repayments, with no curiosity or fees recorded for that 12 months. In whole, Nigeria’s exterior debt servicing for 2024 amounted to $4.66 billion, a rise from $3.5 billion in 2023.
Multilateral collectors accounted for the majority of the exterior debt servicing at $2.62 billion or 56%, with the IMF alone chargeable for about 35% of the entire exterior debt funds in 2024.
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