Nigeria is getting ready to satisfy two main debt obligations earlier than the top of 2025, comprising the $1.12 billion Eurobond and a N100 billion Sukuk bond, each of which characterize essential markers within the nation’s debt administration trajectory.
The 7.625% Eurobond, issued in November 2018 and maturing on 21 November 2025, is a core part of Nigeria’s exterior borrowing programme, designed to fund infrastructure and bolster overseas reserves.
The bond loved robust investor participation at issuance regardless of international uncertainty on the time.
Equally, the 15.743% FGN Sukuk bond, maturing on 28 December 2025, was floated by FGN Roads Sukuk Firm 1 Plc to fund key nationwide highway initiatives.
Valued at N100 billion (about $68.5 million), the Sukuk highlights the Federal Authorities’s try to diversify funding sources and deepen Islamic finance.
When transformed to native foreign money on the trade price of N1,465/$, these two maturities quantity to over N1.7 trillion, posing a big check to Nigeria’s fiscal resilience amid rising debt service pressures.
Information from the Debt Administration Workplace (DMO) present that debt servicing exceeded N5 trillion within the first half of 2025 alone. Analysts have due to this fact raised questions on whether or not the federal government will resort to refinancing, recent borrowings, or different compensation methods to navigate the approaching wave of maturities.
IMF, Eurobonds dominate Nigeria’s debt servicing outflows
Nigeria spent over $2.32 billion (about N3.4 trillion) on exterior debt servicing between January and June 2025, highlighting the size of the nation’s fiscal pressure and publicity to overseas collectors. Based on DMO knowledge, the Worldwide Financial Fund (IMF) and Eurobond holders collectively accounted for practically 65% of whole exterior repayments, absorbing $1.5 billion (N2.197 trillion) in six months.
The IMF was the only largest recipient, with $816.3 million (N1.195 trillion) — representing 35.2% of Nigeria’s exterior debt service invoice. The determine underscores Nigeria’s dependency on IMF credit score amenities, which generally carry stringent compensation obligations. Eurobond obligations adopted carefully, consuming $687.8 million (N1.007 trillion) or 29.6%, reflecting the heavy prices of Nigeria’s industrial market borrowings.
Against this, concessional lenders such because the World Bank’s Worldwide Growth Affiliation (IDA) and the African Growth Bank (AfDB) obtained $346.8 million (N508.1 billion) and $116.9 million (N171.3 billion) respectively. Mixed, these improvement establishments accounted for about $463 million (N678.3 billion) or 20% of whole exterior repayments, offering a comparatively cheaper financing possibility in comparison with high-yield Eurobonds.
In the meantime, repayments to China’s EXIM Bank and China Growth Bank totaled $235.6 million (N345.15 billion), representing lower than 11% of whole exterior servicing. This marks a pointy decline from earlier years when Chinese language loans dominated Nigeria’s infrastructure financing. Analysts attribute this decline to maturing legacy loans and a strategic shift in Nigeria’s borrowing combine away from bilateral exposures towards multilateral and market-based sources.
Regardless of this moderation, Chinese language funding stays important in transport and power infrastructure. Nevertheless, consultants warning {that a} extended slowdown in Chinese language credit score may stall ongoing initiatives, forcing Nigeria to rely extra closely on costly IMF and Eurobond debt to fill financing gaps.
Home borrowing burden deepens
On the home entrance, debt servicing pressures proceed to mount. Between April and June 2025, the Federal Authorities spent an estimated N1.7 trillion on native debt repayments, in accordance with DMO knowledge. Of this, FGN Bonds consumed N1.07 trillion, roughly two-thirds of the entire, whereas Treasury Payments accounted for N537.9 billion (31%).
Different devices, resembling Sukuk, Promissory Notes, Inexperienced Bonds, and Financial savings Bonds, collectively absorbed lower than N95 billion, displaying restricted diversification impression throughout the home debt construction.
In whole, Nigeria’s mixed home and exterior debt servicing hit N5.7 trillion within the first half of 2025 — equal to just about half of the nation’s projected income for the 12 months.
Analysts warn that the rising share of curiosity funds and the dominance of short-term borrowings expose Nigeria to refinancing and rollover dangers. Rising yields, a risky trade price, and sluggish income mobilisation have additional tightened fiscal area, constraining funding for infrastructure, schooling, and healthcare.
Analysts urge balanced debt technique and income growth
Reacting to the event, Chief Government Officer of Chatterhouse Restricted, Akin Olaniyan, urged the federal government to pursue a balanced short- and long-term debt administration method, warning that Nigeria has “little room to manoeuvre” as debt service already consumes a disproportionate share of nationwide revenue.
He in contrast Nigeria’s fiscal state of affairs to “a person utilizing 70–90% of his revenue to service loans,” stressing the pressing have to broaden non-oil revenues and privatize underperforming public belongings.
Olaniyan suggested that any new borrowing must be strictly tied to productive investments able to producing returns, whereas debt restructuring or renegotiation may provide non permanent reduction. He cautioned that deploying overseas reserves to service money owed must be a final resort and known as for fiscal transparency and credible management to rebuild public and investor belief.
Equally, funding banker Mr Tajudeen Olayinka suggested the Federal Authorities to strengthen coverage coordination and financial transmission mechanisms to handle debt pressures successfully. Based on him, whereas local-currency money owed are manageable, overseas obligations pose a higher danger except export earnings enhance. He noticed that Nigeria’s overseas reserves have lately elevated, partly from previous Eurobond and diaspora bond inflows, offering a brief cushion for exterior repayments.
Olayinka recognized weak financial coverage transmission as a core problem, arguing that if Central Bank insurance policies have been functioning successfully, “rates of interest and inflation ought to by now be approaching single digits.” He defined that this inefficiency probably motivated the Central Bank of Nigeria’s current transfer to imagine higher management over the fixed-income market, aiming to reinforce coverage effectiveness and liquidity administration.
Each analysts agree that Nigeria’s path to debt sustainability lies in income diversification, disciplined borrowing, stronger coverage transmission, and personal capital mobilisation. With out these, the nation dangers deepening fiscal fragility regardless of its rising debt service capability.