Nigeria’s external debt has climbed to $145.015 billion in 2025, according to the latest data released by the World Bank. This figure represents a 6.6 per cent increase from the previous reporting period.
The surge in foreign-denominated obligations indicates a significant shift in the country’s fiscal profile over the last decade. Between 2015 and 2025, Nigeria’s external debt rose from $83.21 billion to the current $145.015 billion, marking a total increase of 74.3 per cent.
This rising debt burden places additional pressure on the federal government’s ability to fund critical sectors such as infrastructure, healthcare, and education. As the volume of debt increases, a larger portion of national revenue is diverted toward debt servicing rather than direct developmental projects.
The increase in Nigeria’s external debt to $145bn in 2025 follows years of borrowing to address budget deficits and manage economic shocks caused by fluctuations in oil prices and global inflation.
Fiscal implications and currency volatility
The composition of Nigeria’s external debt remains a critical factor for economic stability. The debt includes loans from multilateral institutions like the World Bank and the International Monetary Fund (IMF), bilateral lenders, and commercial creditors through Eurobond issuances.
While multilateral loans often come with lower interest rates and longer grace periods, commercial debts carry higher costs and stricter repayment schedules. The continuous rise in total debt suggests a heavy reliance on external financing to bridge the gap between government expenditure and revenue collection.
A significant risk factor for the Nigerian economy is the volatility of the Naira. Because external debts are denominated in foreign currencies, primarily the US dollar, any significant depreciation in the local currency increases the cost of servicing the debt in Naira terms. This creates a cycle where currency devaluation makes existing debt more expensive to repay, even without new borrowing.
Economists have frequently pointed to the high debt-to-revenue ratio as a primary concern for Nigeria’s fiscal sustainability. With a significant portion of the budget dedicated to interest payments, the government’s fiscal space for responding to emergencies or funding long-term growth initiatives remains constrained.
The Ministry of Finance and the Debt Management Office (DMO) are expected to address these figures in upcoming budgetary discussions to outline strategies for debt sustainability and revenue optimisation. The government has not yet provided a specific timeline for a revised debt management framework in response to these latest World Bank figures.
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