Nigeria spends $920m on foreign debt servicing in two months

Nigeria spent about $920 million servicing its external debt in the first two months of 2026, according to the Central Bank of Nigeria, as rising loan repayments contributed to a sharp increase in capital outflows from the economy.

Data contained in the CBN’s February 2026 Economic Report showed that the country paid $440 million in January and $480 million in February to meet its foreign debt obligations.

The report indicated that total capital outflows climbed from $1.63 billion in January to $2.75 billion in February, driven largely by higher capital transfers and increased external debt repayments.

According to the apex bank, capital transfers rose by 91.53 per cent to $2.26 billion during the review period, while loan repayments increased from $440 million in January to $480 million in February. Debt servicing accounted for about 17.5 per cent of total capital outflows in February, with capital transfers representing more than 82 per cent.

Sectoral analysis showed that the banking industry recorded the highest capital outflows, accounting for 45.96 per cent of the total, followed by the financing sector with 26.10 per cent, oil and gas with 15.72 per cent, telecommunications with 3.51 per cent, and manufacturing with 2.62 per cent.

Geographically, Lagos accounted for 62.9 per cent of the outflows, while the Federal Capital Territory contributed 37.04 per cent. Other states, including Ondo and Ogun, made up the balance.

Despite the increase in outflows, the CBN said Nigeria’s external position remained resilient, citing improved trade surplus, stronger capital inflows and rising foreign reserves. External reserves increased from $48.88 billion in January to $50.12 billion in February, providing an import cover of 9.61 months.

The latest figures come after Nigeria spent $5.21 billion servicing external debt in 2025, an 11.9 per cent increase from the $4.66 billion recorded in 2024.

The International Monetary Fund has projected that Nigeria’s public external debt will rise from $51.9 billion in 2025 to $72.6 billion by 2027, representing an increase of nearly 40 per cent within two years. The Fund also forecast that interest payments on public debt would increase from $2 billion in 2025 to $3 billion by 2027.

Meanwhile, the Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, has defended government borrowing, arguing that debt should be assessed based on its purpose, cost, expected returns and repayment terms rather than the size of the borrowing alone.