Nigeria has spent a staggering $5.47 billion on foreign debt servicing between January 2024 and February 2025, according to data from the Central Bank of Nigeria.
Nigeria foreign debt servicing significant expenditure highlights the growing burden of debt obligations on the country’s external reserves and fiscal stability.
The debt service payments fluctuated over the period, with May 2024 recording the highest outflow at $854.37 million, while June 2024 saw the lowest monthly payment of $50.82 million.
Nigeria spent about 63.66% of its international payments on servicing foreign debts within the 14-month period.
The significant expenditure on foreign debt servicing has put pressure on Nigeria’s external reserves. The country’s external reserves have been declining in recent months, and the debt service payments have contributed to this decline. The decline in external reserves has also put pressure on the naira, leading to a depreciation of the currency.
The country’s total debt service costs, including external and domestic obligations, rose in the third quarter of 2024, reflecting the combined impact of increased external debt service payments and currency depreciation.
The total debt service cost for Q3 2024 reached an estimated N3.57 trillion, marking a quarter-on-quarter increase of N60 billion or 1.71% from N3.51 trillion recorded in Q2.
Experts have expressed concerns over Nigeria’s debt sustainability and fiscal outlook. The President of the Nigerian Economic Society, Prof Adeola Adenikinju, noted that spending on debt servicing will not yield any positive benefit for the Nigerian economy.
He stated that the country’s debt burden is becoming unsustainable and that there is a need for the government to develop a strategy to reduce the debt burden.
The government has responded to the concerns over debt sustainability by announcing plans to reduce the country’s debt burden. The government has stated that it plans to reduce the debt burden by increasing revenue generation and reducing expenditure. The government has also announced plans to diversify the economy and reduce the country’s dependence on oil exports.
Nigeria’s foreign debt servicing has hit $5.47 billion, highlighting the growing burden of debt obligations on the country’s external reserves and fiscal stability. The significant expenditure on foreign debt servicing has put pressure on Nigeria’s external reserves and has contributed to the decline in the value of the naira.
Experts have expressed concerns over Nigeria’s debt sustainability and fiscal outlook, and the government has responded by announcing plans to reduce the country’s debt burden.