Nigeria’s external debt climbed to $145.015bn in 2025, a 6.6 per cent increase from the previous year, as the country faced mounting pressure from rising debt servicing costs, according to the World Bank’s International Debt Report 2026.
The latest figures show that Nigeria’s external debt has expanded significantly over the past decade, rising by $61.8bn from $83.213bn in 2015. The increase represents a 74.3 per cent growth in the country’s external obligations over the period.
A review of the report by Brandspur Banking News Desk showed that public and publicly guaranteed debt accounted for $62.4bn of Nigeria’s external debt stock, while private nonguaranteed borrowing stood at $54.476bn. Short-term external debt contributed another $28.139bn.
The composition of the country’s public and publicly guaranteed external debt revealed that multilateral institutions remained the largest source of financing, with $31.365bn owed to them. Private creditors accounted for $24.352bn, while bilateral lenders held $6.683bn.
The World Bank’s International Development Association accounted for $18.533bn of Nigeria’s multilateral debt. The country’s obligations also included $5.516bn in International Monetary Fund Special Drawing Rights allocations.
China remained Nigeria’s biggest bilateral creditor, with $5.672bn in outstanding debt. France followed with $774m, while other bilateral creditors accounted for $237m.
Although Nigeria’s debt stock increased, the report recorded improvements in some measures of debt sustainability. External debt relative to exports declined by 4.3 per cent to 212 per cent, while the debt-to-Gross National Income ratio dropped by 6.6 per cent to 51 per cent.
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However, the gains were accompanied by a heavier repayment burden. External debt servicing as a share of exports rose by 9.6 per cent to 19 per cent, while debt servicing relative to Gross National Income increased by 6.9 per cent to five per cent.
The rising cost of servicing external obligations remains a concern for an economy that depends on foreign exchange earnings to meet international payments. Higher debt service requirements can leave governments with less room to fund other priorities, including infrastructure, healthcare and education.
The World Bank reported that low- and middle-income countries collectively paid $1.4tn in debt servicing in 2025, marking the fifth consecutive annual increase. The amount rose by 1.9 per cent, driven largely by payments to private creditors, particularly international bondholders.
Between 2022 and 2025, the countries covered by the report paid approximately $436.1bn more in debt servicing than they received in new financing.
The trend shifted in 2025, when 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 a substantial difference in borrowing terms between official and private creditors.
New commitments from official creditors in 2025 carried an average interest rate of 1.9 per cent, with a maturity period of 25 years and a five-year grace period.
Private creditors, by comparison, charged an average interest rate of 9.6 per cent, with a 12-year maturity period and an eight-year grace period.
The difference underscores the financial implications of borrowing from commercial lenders, particularly as governments contend with higher global financing costs and the need to refinance existing obligations.
