Public Debt – Nigeria’s Biggest Creditors after repaying IMF Loans

The loan, taken under the Rapid Financing Instrument (RFI) during the height of the COVID-19 pandemic, was meant to cushion the economy against the oil price crash and recession risk.

The IMF has confirmed that Nigeria no longer appears on its list of debtor countries. Nigeria has also never taken an IMF bailout loan.

See explanation of Nigeria’s IMF Loan obtained in 2020 as RFI

However, while this repayment signals a commitment to fiscal responsibility, Nigeria still owes a total of N74.38 trillion in domestic debt and $44.9 billion in external debt as of December 2024.

This is based on the most recent data published by the Debt Management Office (DMO), which has yet to publish the data for the first quarter of 2025.

Nigeria’s domestic debt profile continues to be dominated by long-term and short-term instruments issued by the Federal Government:

FGN bonds alone make up nearly 75% of all domestic debt, highlighting the government’s continued reliance on the bond market to fund its budget deficit.

Despite paying off the IMF loan, Nigeria’s external debt burden remains substantial. As of December 2024, total foreign debt stood at $44.9 billion, with the top five creditors being:

Notably, Nigeria’s exposure to commercial debt markets through Eurobonds means higher interest costs and increased vulnerability to refinancing risks.

While the principal IMF loan has been cleared, Nigeria is still obligated to make annual payments of around $30 million in Special Drawing Rights (SDR) as part of service charges and administrative fees until 2029.

These charges are standard for IMF facilities.

Still, the repayment improves Nigeria’s image in global financial circles and may help its case in future multilateral and bilateral negotiations.

Several key drivers explain the growing debt pile:

Currency Devaluation: With the naira trading around N1,550/$1, dollar-denominated debt now translates to more in naira terms.

High Budget Deficits: The federal government continues to finance large deficits by borrowing both locally and abroad.

High Budget Deficits: The federal government continues to finance large deficits by borrowing both locally and abroad.

Refinancing Needs: Maturing short-term securities like Treasury Bills mean that existing debt is often rolled over or refinanced at higher costs.

While Nigeria’s repayment of the IMF loan marks a positive step, analysts caution that broader debt sustainability remains a concern.

The government still faces a heavy debt service burden, especially as Eurobond maturities approach and global interest rates remain relatively high.

To reduce dependency on borrowing, Nigeria will need to expand non-oil revenues, rein in recurrent spending, and deepen structural reforms.

Debt can be a tool for growth—but only when it’s used wisely and managed prudently.