Nigeria has significantly ramped up its external debt servicing payments, with a 50% year-on-year increase recorded in the first four months of 2025, according to new data from the Central Bank of Nigeria (CBN).
Between January and April, the Federal Government spent $2.01 billion on external debt obligations, up from $1.33 billion during the same period in 2024. Debt service alone accounted for 77.1% of the country’s total international payments during this period, a steep rise from the 64.5% share recorded last year.
In total, Nigeria’s international payments which include debt servicing, remittances, and letters of credit reached $2.60 billion as of April 2025, compared to $2.07 billion in the same period a year earlier.
This surge in payments comes amid a notable drop in foreign reserves, with the country reportedly losing around $3 billion in reserves during the review period.
A breakdown of the monthly payments shows a relatively stable outflow in January and February, but a sharp spike in March and April:
- January 2025: $540.67 million (vs. $560.52 million in Jan 2024)
- February 2025: $276.73 million (vs. $283.22 million)
- March 2025: $632.36 million (vs. $276.17 million)
- April 2025: $557.79 million (vs. $215.20 million)
Combined, March and April alone accounted for nearly $1.2 billion in debt servicing.
The rise coincides with the full repayment of Nigeria’s $3.4 billion loan from the International Monetary Fund (IMF), secured under the Rapid Financing Instrument (RFI) during the COVID-19 pandemic.
In a statement, the IMF confirmed that the debt was fully repaid as of April 30, 2025. The facility, disbursed in April 2020, was part of a global emergency support initiative to help countries navigate the economic fallout from the pandemic and a sharp decline in oil prices.
According to the IMF, Nigeria will continue to incur annual charges of approximately $30 million tied to Special Drawing Rights (SDR) until its SDR holdings currently at SDR 3,164 million ($4.3 billion) align with its SDR allocation of 4,027 million ($5.5 billion). These charges are based on the SDR interest rate, which is updated weekly.
While the full repayment of the IMF facility is a milestone, the increasing debt servicing costs and declining reserves may signal broader fiscal pressures ahead for the Nigerian economy.
