How Nigeria paid over $2b on debt servicing in just 4 months
Data from the Central Bank of Nigeria indicated that total international payments, which include debt servicing, remittances, and other related outflows, reached $2.60 billion from January to April 2025.
Of this total, Nigeria’s debt service obligations alone constituted $2.01 billion, accounting for 77.1% of the overall payments and reflecting a 12.6 percentage point increase from the $1.08 billion noted in the final quarter of 2024.
On a month-to-month basis, debt servicing was recorded at $540.67 million in January 2025, which is slightly lower than the $560.52 million noted in January 2024. In February 2025, payments fell to $276.73 million but surged again in March, reaching $632.36 million. The upward trajectory persisted in April, with payments hitting $557.79 million, signifying a 159% increase from the $215.20 million recorded in April 2024.
The escalating debt servicing burden underscores Nigeria’s worsening foreign exchange difficulties, particularly amid dwindling foreign reserves. This situation poses significant adverse effects on the government’s capacity to invest in essential infrastructure and social development, as debt commitments increasingly consume a larger portion of fiscal resources.
Consequently, there is an urgent necessity to enhance debt management frameworks by implementing stringent borrowing limits, especially concerning external loans. Furthermore, it is crucial to improve domestic revenue generation through comprehensive tax administration reforms to expand the tax base and mitigate the country’s excessive dependence on debt.
