Nigeria spent $2.86 billion on exterior debt servicing within the first eight months of 2025, new figures from the Central Bank of Nigeria (CBN) have proven.
This accounted for 69.1% of whole overseas funds of $4.14 billion in the course of the interval.
Comparatively, the nation spent $3.06 billion on debt in the identical interval of 2024, representing 70.7% of whole overseas funds of $4.33 billion.
The information reveal that though Nigeria diminished its absolute debt service invoice by about $198 million (6.49%) year-on-year, debt repayments nonetheless dominate its exterior obligations.
Basically, for each $10 that left Nigeria between January and August 2025, practically $7 went in direction of servicing debt.
Unstable month-to-month debt service funds
Month-to-month information confirmed important fluctuations, reflecting the construction of Nigeria’s mortgage obligations. In January 2025, the nation paid $540.67 million on debt, barely decrease than $560.52 million in January 2024.
By February, funds dropped additional to $276.73 million, earlier than surging to $632.36 million in March, greater than double the $276.17 million recorded in March 2024.
April remained excessive at $557.79 million in contrast with $215.20 million a 12 months earlier, whereas Could recorded a pointy fall to $230.92 million, down by $623.45 million from the $854.37 million in Could 2024.
June climbed modestly to $143.39 million, nearly triple the $50.82 million recorded a 12 months earlier. July slipped once more to $179.95 million, representing a two-thirds decline in contrast with the $542.5 million of July 2024.
By August, funds recovered to $302.3 million, barely larger than the $279.95 million recorded a 12 months earlier.
The month-on-month modifications in 2025 underline the erratic nature of Nigeria’s debt service obligations. From January to February, funds fell by practically 49%, then spiked by 129% in March earlier than dropping by 12% in April. Could noticed a steep decline of 59% relative to April, June fell additional by 38%, earlier than delicate rebounds in July and August.
Debt service dominates Nigeria’s foreign exchange outflows
The dominance of debt service in Nigeria’s worldwide funds is hanging. In 2025, 69.1% of all overseas outflows within the first eight months have been used to service debt. In the identical interval of 2024, the share was even larger at 70.7%. This means that debt service obligations constantly devour at the very least seven out of each ten {dollars} Nigeria spends on worldwide funds.
This development raises essential considerations. First, it locations strain on the nation’s overseas reserves, particularly in months of heavy outflows comparable to March 2025, when $632.36 million went to debt servicing.
Second, it reduces Nigeria’s capability to allocate scarce overseas alternate to important imports and capital items that would help home manufacturing. Third, it exposes fiscal vulnerability as a result of debt obligations are non-discretionary, that means the federal government can’t defer or keep away from them with out extreme penalties.
What it is best to know
As Nigeria spends much less on overseas debt servicing, Nairametrics noticed that the nation’s exterior reserves have surpassed the $42 billion mark, the very best in over six years.
In line with the information from the CBN, the nation’s exterior reserve has been on an upward swing because the 14th of July 2025.
That is regardless of the volatility of the crude oil market, with costs at under $70 per barrel as towards the 2025 funds benchmark of $75 per barrel.
Crude oil has, over the last decade, been Nigeria’s greatest overseas alternate earner, contributing about 90%.
Analysts have attributed this rise in Nigeria’s exterior reserves to a rise in oil income as a consequence of a much-improved output from what it was.
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