Data from the Central Bank of Nigeria revealed that total international payments, including debt servicing, remittances, and related outflows reached $2.60 billion between January and April 2025.
Of this amount, Nigeria’s debt service bill alone accounted for $2.01 billion, representing 77.1% of total payments and a 12.6 percentage point increase from the $1.08 billion recorded in the last quarter of 2024.
On a month-on-month basis, debt servicing amounted to $540.67 million in January 2025, slightly below the $560.52 million recorded in January 2024. By February 2025, payments declined to $276.73 million but rose sharply again in March, reaching $632.36 million.
The upward trend continued in April, with payments reaching $557.79 million, representing a 159% increase from the $215.20 million recorded in April 2024. The rising debt servicing burden reflects Nigeria’s deepening foreign exchange challenges, especially in the face of declining foreign reserves.
This trend has significant negative implications for the government’s ability to invest in critical infrastructure and social development, as debt obligations consume a growing share of fiscal resources.
There is, therefore, an urgent need to strengthen debt management frameworks by enforcing strict borrowing limits, particularly for external loans.
In addition, enhancing domestic revenue mobilisation through comprehensive tax administration reforms is essential to broaden the tax base and reduce the country’s over-reliance on debt.
(Nigeria Economic Update Issue 28)
