Nigeria spends $2.86bn on external debt service in eight months – CBN

Nigeria spent $2.86 billion on servicing its external debt between January and August 2025, according to new figures from the Central Bank of Nigeria (CBN).

The amount represented 69.1% of the country’s total foreign payments of $4.14 billion in the period.

In comparison, $3.06 billion was spent on debt service in the same period of 2024, which accounted for 70.7% of foreign outflows then.

The CBN data showed wide monthly fluctuations in 2025, reflecting the structure of Nigeria’s loan obligations.

In January, debt payments stood at $540.67 million, slightly lower than $560.52 million in January 2024.

Payments fell sharply to $276.73 million in February, before surging to $632.36 million in March — more than double the $276.17 million recorded a year earlier.

April remained high at $557.79 million compared with $215.20 million in 2024, but May saw a steep drop to $230.92 million, far below the $854.37 million recorded the previous year.

June rose modestly to $143.39 million, almost triple the $50.82 million of June 2024, before July declined to $179.95 million, a two-thirds drop from $542.5 million the year before.

By August, payments recovered slightly to $302.3 million, higher than $279.95 million in 2024.

The erratic pattern highlights the unpredictable nature of Nigeria’s debt service obligations.

For instance, payments fell nearly 49% between January and February, spiked 129% in March, dropped 12% in April, then plunged 59% in May before further declines in June and modest rebounds in July and August.

The dominance of debt service in Nigeria’s foreign payments remains significant.

In both 2024 and 2025, at least seven out of every ten dollars spent abroad went to creditors.

Analysts warn that this continues to put pressure on external reserves, limit forex availability for critical imports, and expose Nigeria to fiscal risks since debt service payments are non-discretionary.

However, despite high obligations, Nigeria’s external reserves have risen above $42 billion — the highest level in more than six years.

The increase has been attributed to stronger oil output, even as crude prices remain below $70 per barrel, short of the $75 benchmark in the 2025 budget.

Oil, which accounts for about 90% of Nigeria’s foreign exchange earnings, has continued to drive reserve growth despite market volatility.