Nigeria Spends Over N2trn to Repay Domestic Debt, External Payments Hit $1.8Bn
- Nigeria spent over N2.28 trillion on domestic debt service, with interest payments alone more than 80%
- External debt service reached $1.80 billion, dominated by commercial obligations at $1.39 billion
- Multilateral lenders like the International Development Association and the African Development Bank lead
Legit.ng journalist Dave Ibemere has over a decade of experience in business journalism, with in-depth knowledge of the Nigerian economy, stocks, and general market trends.
Nigeria’s debt service obligations surged in the final quarter of 2025, with total domestic debt service rising to N2.28 trillion, while external debt service payments stood at $1.80 billion.
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Domestic debt repayment
The figures captured in the Debt Management Office public debt report released on Monday, April 13, revealed mounting fiscal pressures on the government, as interest payments continued to dominate debt servicing costs across both domestic and external obligations.
Domestic data shows that interest payments alone accounted for N2.17 trillion between October and December, representing over 95% of total domestic debt service. In contrast, principal repayments were significantly lower at N108.88 billion.
A breakdown indicates that FGN Naira Bonds remained the largest cost driver, with N1.32 trillion in interest payments during the quarter. Nigerian Treasury Bills followed at N742.34 billion, reflecting heavy reliance on short-term borrowing instruments.
Other components of interest payments included Sukuk bonds at N101.02 billion, FGN Savings Bonds at N3.99 billion, and Green Bonds at N5.59 billion recorded in December 2025.
On a monthly basis, December recorded the highest debt service burden at N909.63 billion in interest payments, compared to N660.52 billion in October and N603.37 billion in November.
External debt service breakdown (Q4 2025)
Also, Nigeria’s total external debt service payments reached $1.80 billion in the quarter, driven largely by commercial debt obligations.
- Commercial debt: $1.39 billion
- Multilateral debt: $350.14 million
- Bilateral debt: $60.27 million
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Commercial creditors accounted for the bulk of payments, with Eurobond repayments alone totalling $1.38 billion.
Top external debt service payments by creditors
- Eurobond holders – $1.38 billion
- International Development Association (IDA) – $192.73 million
- African Development Bank (AfDB) – $93.45 million
- International Bank for Reconstruction and Development (IBRD) – $42.76 million
- Agence Française de Développement (AFD) – $37.97 million
- China Development Bank – $10.41 million
Other multilateral creditors, including the African Development Fund and International Fund for Agricultural Development, recorded smaller payment volumes during the period.
Explaining the development, economist Ademola Asunoye told Legit.ng that Nigeria's debt is consuming too much of the government's revenue.
He said:
"In simple terms, Nigeria spends about N70 of every N100 it earns on debt servicing, compared to South Africa’s R22 for every R100.
"This means Nigeria’s debt-service burden relative to revenue is more than three times higher. Debt is not only about how much is owed, but also about how comfortably it can be serviced without squeezing funding for critical sectors. That crucial context is often missing from such comparisons."
FG declares no more loans from the IMF after clearing debt
Earlier, Legit.ng reported that Nigeria has no immediate plans to seek financial assistance from the International Monetary Fund, as ongoing domestic reforms continue to strengthen the country’s economic position, Finance Minister Wale Edun said on Thursday.
Speaking at a briefing of African finance ministers during the IMF and World Bank Annual Meetings in Washington on Friday, April 17, Edun said policy reforms implemented over the past two years had restored credibility and improved resilience against global economic shocks.
He noted that Nigeria had prioritised market-based adjustments, particularly in foreign exchange and petroleum pricing, avoiding administrative controls that could distort the economy.
Source: Legit.ng
