Nigeria’s external debt rose to $145.02 billion at the end of 2025, representing a 6.6 per cent increase compared with the previous year, according to the World Bank’s International Debt Report 2026.
The report, released on Thursday, revealed that Nigeria’s external debt had increased significantly over the past decade, rising from $83.21 billion in 2015 to $145.02 billion in 2025.
This represents an increase of approximately $61.8 billion within 10 years, highlighting the country’s growing financial obligations to foreign creditors.
According to the World Bank, Nigeria’s external debt comprises $62.4 billion in public and publicly guaranteed obligations, $54.476 billion in private-sector debt without government guarantees, and $28.139 billion in short-term liabilities.
The report noted that government-related borrowing accounts for less than half of the country's total external debt, with private-sector obligations and short-term borrowing making up a significant portion.
It also highlighted growing concerns over Nigeria’s debt-servicing obligations, noting that the country spent an increasing proportion of its export earnings on repaying external loans.
Nigeria’s external debt-to-exports ratio stood at 212 per cent in 2025, while its external debt-to-gross national income ratio was 51 per cent.
The debt-service-to-exports ratio increased by 9.6 per cent, while debt servicing relative to gross national income rose by 6.9 per cent during the year.
Although some debt indicators improved compared with 2024, the rising cost of servicing external obligations suggests increasing pressure on the country's finances.
The World Bank further disclosed that developing countries paid a combined $1.4 trillion in debt servicing in 2025, marking the fifth consecutive year of increases.
Between 2022 and 2025, low- and middle-income countries paid approximately $436.1 billion more in debt repayments than they received in new financing.
The World Bank's Chief Statistician, Haishan Fu, warned that developing economies were borrowing more while spending an increasing share of their resources on debt repayments.
He said the situation was reducing the funds available for critical development priorities, including infrastructure, education, healthcare and job creation.
Fu stressed that developing countries needed more affordable, transparent and sustainable financing rather than simply accumulating additional debt.
Meanwhile, the report highlighted Nigeria’s return to the international bond market in 2025, when the Federal Government raised $2.3 billion through a two-tranche sovereign bond issuance.
The bonds comprised a 10-year instrument carrying an interest rate of 8.625 per cent and a 20-year bond with an interest rate of 9.125 per cent.
Nigeria was identified as the third-largest issuer among Sub-Saharan African countries eligible for International Development Association financing during the period.
The World Bank also revealed that Nigeria's average interest rate on new official external borrowing commitments stood at 1.9 per cent in 2025, compared with 9.6 per cent for private creditors.
The figures demonstrate the significantly higher cost of obtaining loans from private international lenders.
Another issue raised in the report was Nigeria’s use of a $5 billion Total Return Swap (TRS) financing arrangement in 2026.
Under the arrangement, Nigeria pledged domestic securities worth approximately $6.7 billion as collateral to secure the $5 billion financing.
The World Bank explained that such arrangements could provide governments with quick access to foreign currency but warned that they also carried risks relating to collateral requirements, refinancing, margin calls and transparency.
It urged governments using such financial arrangements to disclose important details, including borrowing amounts, repayment obligations, maturity periods and assets pledged as collateral.
The report concluded that rising borrowing costs and debt-servicing obligations remained major challenges for developing economies, particularly countries seeking to balance financial stability with economic development.