Nigeria’s External Debt Servicing Soars to $2.01 Billion Amid Fiscal Pressures

Nigeria spent $2.01 billion on external debt servicing between January and April 2025, marking a sharp 49.2% rise from the $1.34 billion paid in the same period last year, according to new data from the Central Bank of Nigeria (CBN).

The increase underscores the growing strain on the country’s finances as it struggles to meet external obligations in the face of persistent foreign exchange shortages and limited revenue inflows.

The International Monetary Fund’s (IMF) had earlier warned that Nigeria’s debt sustainability is under threat. The IMF had earlier forecasted that the government would record fiscal deficits of 4.5% of GDP in both 2025 and 2026, compared to -3.4% in 2024.

This widening gap between revenue and expenditure—driven by high interest payments, subsidies, and recurrent costs—means the federal government will likely rely more heavily on borrowing to stay afloat.

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General Government Overall Balance, a key indicator of fiscal health, measures the difference between total government revenue and total spending. As this balance worsens, borrowing requirements grow—raising the risk of higher debt costs, especially if interest rates remain high or investor appetite weakens.