Nigeria’s external debt service crossed $5bn in 2025 after payments in 2018–2025 dwarfed the previous decade

Key Takeaways

  • Nigeria’s external debt service entered a heavier phase in 2018.
  • External debt service crossed $5bn in 2025.
  • Nigeria paid about $22.2bn from 2018 to 2025.
  • That was about 6x the $3.7bn paid from 2008 to 2017.
  • The 2006 spike reflects one-off debt settlement payments.

Debt relief once pushed Nigeria’s external debt service down to relatively low levels. That era has clearly faded.

After years of mostly sub-$500 million annual external debt service payments, Nigeria’s payments began rising sharply from 2018 and crossed $5 billion in 2025. Between 2018 and 2025, the country paid about $22.2 billion in external debt service, roughly six times the $3.7 billion recorded between 2008 and 2017.

The rising service cost comes against a larger debt stock. As of December 31, 2025, Nigeria’s total public debt stood at ₦159.28 trillion, or $110.97 billion, while external debt stock stood at about $51.86 billion.

Source:

Debt Management Office, Nigeria

Period:

2006-2025
HTML code to embed chart
Want a bespoke report?
Reach out
Click to copy HTML embed code
Tags
Related Insights
Three African countries are projected to have debt exceeding their GDP in 2026
  • Sudan is projected to have Africa’s highest debt-to-GDP ratio in 2026, at 169.1%.
  • Only three African countries are projected to owe more than the size of their economies in 2026.
  • Senegal and Mozambique join Sudan among countries with debt-to-GDP ratios above 100%.
  • Africa’s average government debt-to-GDP ratio is projected at 60.7% in 2026.
  • Nigeria’s projected debt-to-GDP ratio of 32.3% is far below the African average.
Two-thirds of IDA’s commitments in one year went to Africa, led by Nigeria’s $3.1bn
  • Africa received 66% of IDA’s FY2025 commitments.
  • Africa’s total IDA allocation was $22.4 billion out of $33.8 billion.
  • Nigeria was the largest borrower from the DA globally, with $3.1 billion in loans.
  • Bangladesh ranked second with $3 billion.
  • Six of the top ten borrowers were African countries.
  • Nigeria accounted for 9.3% of total FY2025 IDA commitments.
Oyo has reduced external debt by 36% and domestic debt by 22% under Makinde
  • Oyo reduced external and domestic debt by the end of 2025.
  • External debt fell faster than domestic debt.
  • External debt declined more consistently over the period.
  • Oyo’s local debt peaked around 2022–2023 before falling back.
  • The state appears to have prioritised reducing FX exposure.
Africa has been the world's biggest World Bank borrower since 2017, owing $152 billion as of 2024
  • Africa has been the world's biggest World Bank borrower since 2017, and the gap is widening.
  • Three crises drove it: an infrastructure gap, the 2014 commodity crash, and COVID-19.
  • The World Bank leaned in deliberately — 66% of all IDA funds went to Africa in 2025 alone.
  • It's not really "Africa's debt" — it's Nigeria's, Kenya's, Ethiopia's, Egypt's, Tanzania's, and Morocco's.
  • Every other region is slowing down, but Africa's curve is still climbing.
Under Sanwo-Olu, Lagos cut its external debt and more than doubled its domestic debt
  • Lagos cut external debt, but increased domestic debt.
  • The drop in external debt was meaningful, but the rise in domestic debt was much larger.
  • Stronger IGR gave Lagos more room to borrow and repay.
  • The state chose local funding over heavier dollar exposure.
Lagos's external debt has reduced by nearly three times more than the other six states combined
  • Lagos's debt reduction is larger than the other six combined.
  • Oyo posted the fastest reduction rate.
  • The biggest percentage cut did not equal the biggest dollar cut.
  • Debt reduction was concentrated, not broad-based.
  • Higher state revenues likely created room for repayments.
  • Lagos had the strongest fiscal capacity among the states shown.
  • Smaller debt stocks made percentage declines easier for some states.
POPULAR TOPICS
SIGN UP TO OUR NEWSLETTER
Get periodic updates about the African startup space, access to our reports, among others.
Subscribe Here
Subscription Form
A product of Techpoint Africa. All rights reserved