Nigeria spent $932.1 million servicing its external debt in the second quarter of 2025, according to new data released by the Debt Management Office (DMO). The report underscores the country’s continued fiscal strain from rising foreign debt obligations.
Breakdown of Q2 2025 External Debt Payments
The DMO report, titled “Actual External Debt Service Payments for April – June 2025”, shows that multilateral, bilateral, and commercial creditors all received payments during the period, with multilateral institutions accounting for the majority.
Out of the total $932.1 million:
-
Multilateral creditors received $629.38 million (68% of total payments).
-
Bilateral creditors were paid $41.18 million.
-
Commercial creditors, including Eurobond holders and Unicredit SPA, received $261.55 million.
The International Monetary Fund (IMF) was the single largest recipient, with $415.6 million paid in principal obligations—nearly half of all external debt service in the quarter.
Key Creditors
Within the multilateral category, payments were made to:
-
International Development Association (IDA): $121.37 million
-
International Bank for Reconstruction and Development (IBRD): $36.21 million
-
African Development Bank (AfDB): $43.75 million
-
African Development Fund (ADF): $3.66 million
-
Islamic Development Bank (IsDB): $2.22 million
-
European Development Fund (EDF): $1.69 million
For bilateral creditors, disbursements included:
-
Agence Française de Développement (AFD): $34.48 million
-
China Development Bank (CDB): $6.64 million
-
Japan International Cooperation Agency (JICA): $61,529
In the commercial category:
-
Eurobond holders received $260.07 million in interest payments.
-
Unicredit SPA received $1.47 million.
Rising Debt Burden
Between January and April 2025, Nigeria spent over $2.01 billion on external debt servicing — a 50% increase compared to the same period in 2024.
The IMF earlier confirmed that Nigeria has fully repaid the $3.4 billion financial support it received in 2020 under the Rapid Financing Instrument (RFI), which was designed to cushion the economic impact of the COVID-19 pandemic and falling oil prices.
However, the Fund noted that Nigeria will continue to pay about $30 million annually in Special Drawing Rights (SDR) charges over the coming years, due to differences between the country’s SDR holdings and allocations.
Domestic Debt and Broader Fiscal Outlook
As of mid-2025, Nigeria’s domestic debt stock stood at N76.59 trillion, with Federal Government Bonds (FGN Bonds) accounting for N60.65 trillion (about 79% of the total).
Domestic debt service in Q2 2025 reached N1.707 trillion, comprising N1.686 trillion in interest payments and N20.14 billion in principal repayments.
Meanwhile, the World Bank projects that Nigeria’s total public debt-to-GDP ratio will decline from 42.9% to 39.8%, marking the first potential drop in over a decade.
Emmanuel Bassey is a Financial Expert that has worked in the Banking and Finance Industry for over 15+ years across different banks in Nigeria
