Nigeria spent a staggering $2.01 billion on external debt servicing between January and April 2025, representing a sharp 50 per cent increase from the $1.33 billion recorded during the same period in 2024.
This alarming figure, released by the Central Bank of Nigeria (CBN) in its latest international payments data, signals growing fiscal stress and poses a significant threat to the country’s financial stability.
The report shows that debt servicing now constitutes 77.1 percent of Nigeria’s total foreign exchange (FX) outflows, up from 64.5 percent in the same period last year.
Total international payments stood at $2.60 billion in the first four months of 2025, with debt obligations alone swallowing the lion’s share.
The consequences are already evident. Nigeria’s foreign reserves shrank by nearly $3 billion within the same four-month period as the government scrambled to meet its external debt obligations.
Dr. Bode Osuntokun, a senior economist and fellow at the Centre for Development Strategy, expressed serious concern over the trajectory.
“We’re using up valuable forex to service debt rather than grow the economy. The fact that over three-quarters of forex outflows are now for debt servicing means little is left for infrastructure, trade support, or capital importation,” he said.
He further pointed out that Nigeria’s fragile export base and limited revenue generation capacity are exacerbating the strain, making the country more vulnerable to external economic shocks.
A closer look at the CBN data reveals that nearly $1.2 billion—more than half of the total debt servicing payments for the period—was made in just two months—March and April.