Nigeria spends $2.01 billion on external debt servicing in first 4 months of 2025

• Nigeria spent $2.01 billion on external debt servicing in the first four months of 2025
• The amount spent on debt servicing accounted for 77.1 per cent of Nigeria’s total foreign outflows within the period
• Debt service costs so far spiked in March and April 2025

Between January and April 2025, Nigeria spent $2.01 billion on external debt servicing, reflecting a 50 per cent spike compared to the amount spent on debt servicing in the same period in 2024.

In 2024, the country spent $1.33 billion, which was about 64.5 per cent of the total $2.07 billion foreign exchange (FX) outflows, on debt servicing.

An analysis of the international payments data published on the website of the Central Bank of Nigeria (CBN) showed that debt service costs account for 77.1 per cent of Nigeria’s total foreign outflows.

The CBN’s report stated that in the first four months of 2025, Nigeria’s total international payments, including debt servicing, remittances, and letters of credit, stood at $2.60 billion.

The share of debt service costs from international payments made in the first four months of 2025 indicates that Nigeria’s FX reserves, which depleted by about $3 billion within the four months, are mostly spent on servicing past loans.

Nigeria spent more on debt servicing in March and April

An analysis of the CBN’s data on a month-on-month spending showed that Nigeria spent more on servicing debts in March and April.

According to the data, the sum of $540.67 million was spent on debt servicing in January 2025, a slight reduction from the $560.52 million recorded in January 2024.

In February, a total of $276.73 million was expended on servicing debts, slightly below the $283.22 million spent in February 2024.

However, in March, debt servicing costs gulped $632.36 million, more than double the $276.17 million paid in March 2024.

As of April, debt servicing costs maintained the upward trend, as the sum of $557.79 million was paid, representing a 159 per cent increase from the $215.20 million recorded in April 2024.

Nigeria’s debt service costs reached N3.57 trillion in Q3 2024

As of the third quarter of 2024, Nigeria’s total debt service costs rose by N60 billion to N3.57 trillion, a 1.71 per cent increase from N3.51 trillion recorded in the second quarter (Q2) of 2024, according to the Debt Management Office (DMO).

The increase in debt service costs reflected the impact of higher external debt service obligations and naira depreciation on borrowings.

According to the DMO, the cost of servicing external debts in Q3 2024 amounted to $1.34 billion, translating to N2.14 trillion with the DMO’s September exchange rate of N1,601.03/$.

The amount represents an increase of 29.70 per cent in naira terms or 19.44 per cent in dollar terms compared to $1.12 billion (N1.65 trillion) in Q2 with the DMO’s June 2024 rate of N1,470.19/$.

The rise was driven by higher obligations to multilateral and bilateral creditors, as well as interest payments on commercial loans.

Nigeria’s external debt servicing rises to $1.08 billion in Q4 2024

Meanwhile, TheRadar earlier reported that the Debt Management Office (DMO) disclosed that Nigeria’s external debt service obligations reached $1.08 billion in the fourth quarter (Q4) of 2024.

The DMO data, which covers the breakdown of external debt service payments by creditor category, further showed that multilateral loans accounted for the largest share of debt service, followed by commercial and bilateral loans.