Nigeria’s external debt stock surged to $145.015bn in 2025, representing a 6.6 per cent increase from the previous year and a staggering 74.3 per cent rise over the past decade, raising fresh concerns about the country’s growing debt burden and mounting repayment obligations.
The latest figures, contained in the World Bank’s *International Debt Report 2026*, showed that Nigeria’s external debt increased by $61.8bn from $83.213bn recorded in 2015, underscoring the scale of the country’s borrowing over the 10-year period.
The report revealed that public and publicly guaranteed debt accounted for $62.4bn of the total external debt stock, while private nonguaranteed debt stood at $54.476bn. Short-term external debt accounted for another $28.139bn.
A breakdown of Nigeria’s public and publicly guaranteed external obligations showed that multilateral creditors held the largest exposure at $31.365bn, followed by private creditors with $24.352bn and bilateral creditors with $6.683bn.
Among multilateral lenders, the World Bank’s International Development Association (IDA) accounted for $18.533bn, while International Monetary Fund Special Drawing Rights allocations stood at $5.516bn.
China remained Nigeria’s largest bilateral creditor, with $5.672bn in outstanding loans, significantly ahead of France, which accounted for $774m, while other bilateral creditors held $237m.
The figures highlight Nigeria’s substantial dependence on external financing, particularly from multilateral institutions and international private creditors, even as the country continues to grapple with the cost of servicing its existing obligations.
DEBT SERVICE BURDEN WORSENS
Despite the increase in the overall debt stock, Nigeria recorded improvements in two major debt sustainability indicators.
The World Bank report showed that external debt relative to exports declined by 4.3 per cent to 212 per cent, while the external debt-to-Gross National Income ratio fell by 6.6 per cent to 51 per cent.
However, the improvement in these indicators was accompanied by a deterioration in debt servicing obligations.
External debt service as a proportion of exports increased by 9.6 per cent to 19 per cent, while debt service relative to Gross National Income rose by 6.9 per cent to five per cent.
The development suggests that although Nigeria’s debt stock relative to key economic indicators improved, the pressure of meeting repayment obligations continued to intensify.
GLOBAL DEBT SERVICE HITS $1.4 TRILLION
The World Bank also warned of rising debt servicing pressures across low- and middle-income countries, which collectively paid a record $1.4tn in debt service in 2025.
The amount represented the fifth consecutive year of increases, with payments rising by 1.9 per cent, driven largely 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, reflecting the growing strain of external borrowing on developing economies.
However, the trend reversed in 2025, when long-term debt flows recorded a net inflow of $45.4bn, compared with a net outflow of $118.4bn in 2024.
PRIVATE CREDITORS CHARGE FIVE TIMES MORE
The report further exposed the wide gap in borrowing costs between official and private creditors, with private lenders charging significantly higher interest rates.
New financing 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.
In contrast, private creditors charged an average interest rate of 9.6 per cent, with a 12-year maturity and an eight-year grace period.
The difference highlights the significantly higher cost of accessing private international capital markets compared with borrowing from multilateral and bilateral official institutions.
For Nigeria, the combination of rising external debt, higher servicing obligations and relatively expensive private financing presents a continuing challenge for debt management, fiscal sustainability and the country’s capacity to channel resources into infrastructure and economic development.
