Nigeria spent $2.86 billion on external debt servicing in the first eight months of 2025, new figures from the Central Bank of Nigeria (CBN) have shown.
This accounted for 69.1% of total foreign payments of $4.14 billion during the period.
Comparatively, the country spent $3.06 billion on debt in the same period of 2024, representing 70.7% of total foreign payments of $4.33 billion.
The data reveal that although Nigeria reduced its absolute debt service bill by about $198 million (6.49%) year-on-year, debt repayments still dominate its external obligations.
Essentially, for every $10 that left Nigeria between January and August 2025, nearly $7 went towards servicing debt.
Monthly data showed significant fluctuations, reflecting the structure of Nigeria’s loan obligations. In January 2025, the country paid $540.67 million on debt, slightly lower than $560.52 million in January 2024.
By February, payments dropped further to $276.73 million, before surging to $632.36 million in March, more than double the $276.17 million recorded in March 2024.
April remained high at $557.79 million compared with $215.20 million a year earlier, while May recorded a sharp fall to $230.92 million, down by $623.45 million from the $854.37 million in May 2024.
June climbed modestly to $143.39 million, almost triple the $50.82 million recorded a year earlier. July slipped again to $179.95 million, representing a two-thirds decline compared with the $542.5 million of July 2024.
By August, payments recovered to $302.3 million, slightly higher than the $279.95 million recorded a year earlier.
The month-on-month changes in 2025 underline the erratic nature of Nigeria’s debt service obligations. From January to February, payments fell by nearly 49%, then spiked by 129% in March before dropping by 12% in April. May saw a steep decline of 59% relative to April, June fell further by 38%, before mild rebounds in July and August.
The dominance of debt service in Nigeria’s international payments is striking. In 2025, 69.1% of all foreign outflows in the first eight months were used to service debt. In the same period of 2024, the share was even higher at 70.7%. This indicates that debt service obligations consistently consume at least seven out of every ten dollars Nigeria spends on international payments.
This trend raises important concerns. First, it places pressure on the country’s foreign reserves, especially in months of heavy outflows such as March 2025, when $632.36 million went to debt servicing.
Second, it reduces Nigeria’s ability to allocate scarce foreign exchange to essential imports and capital goods that could support domestic production. Third, it exposes fiscal vulnerability because debt obligations are non-discretionary, meaning the government cannot defer or avoid them without severe consequences.
As Nigeria spends less on foreign debt servicing, Naijaonpoint observed that the country’s external reserves have surpassed the $42 billion mark, the highest in over six years.
According to the data from the CBN, the country’s external reserve has been on an upward swing since the 14th of July 2025.
According to the data from the CBN, the country’s external reserve has been on an upward swing since the 14th of July 2025.
This is despite the volatility of the crude oil market, with prices at below $70 per barrel as against the 2025 budget benchmark of $75 per barrel.
Crude oil has, over the decade, been Nigeria’s biggest foreign exchange earner, contributing about 90%.
Analysts have attributed this rise in Nigeria’s external reserves to an increase in oil revenue due to a much-improved output from what it used to be.