Nigeria spent a total of $2.3 billion servicing external debt in the first half of 2025, an amount almost equal to the $2.25 billion the country recently raised through a 10-year Eurobond issue.
The figures underlined the growing pressure that debt obligations continue to put on the country’s already limited fiscal position.
According to data compiled by Intelpoint, the data and research unit of Techpoint Africa, the International Monetary Fund (IMF) accounted for the majority of Nigeria’s external debt service payments. The country paid $816.3 million to the IMF between January and June 2025, representing more than 35 percent of total outflows. The increase reflected Nigeria’s growing exposure to IMF credit, including previous credit lines linked to special drawing rights (SDRs) and balance of payments support.
Eurobond obligations followed closely, with $687.8 million paid in the six-month period. The high cost of servicing commercial debt highlights the substantial burden of Nigeria’s market borrowings, which carry higher interest rates and tighter repayment terms. Combined, IMF and Eurobond holders absorbed almost two-thirds of total external debt payments in the first half of 2025.
Payments to multilateral development lenders – including the World Bank’s International Development Association (IDA) and the African Development Bank (AfDB) – amounted to some $463 million. These institutions typically offer financing on favorable terms, but the consistent payments revealed Nigeria’s sustained dependence on external development support for social, health, and infrastructure programs.
Meanwhile, payments to Chinese creditors continued to decline. Nigeria paid $235.6 million to the Export-Import Bank of China (EXIM) and China Development Bank (CDB) together, representing less than 11 percent of the total debt service bill. The reduced exposure suggests that some Chinese-backed loans may be approaching maturity or that the government is rebalancing its foreign loan portfolio.
The rising cost of servicing external debt has intensified scrutiny on Nigeria’s fiscal strategy, especially as the country struggles with weak revenue mobilization, high governance costs and persistent structural headwinds. While the government maintains that the debt-to-GDP ratio remains within globally acceptable limits, analysts warn that the debt-to-income ratio, one of the highest in Africa, poses a more urgent challenge.
Economists said the debt service pattern in the first half of 2025 reflected increasingly tight fiscal space, where scarce public resources are increasingly diverted toward repayment rather than investment in critical sectors. With external liabilities almost equaling recent Eurobond inflows, experts are urging the government to prioritize revenue reforms, curb excessive borrowing and deepen economic diversification to avoid a potential debt sustainability crisis.