Nigeria’s External Debt Hits $145bn; China Tops Bilateral Creditors with $5.67bn

Nigeria’s total external debt stock climbed to $145.02 billion at the end of 2025, a 6.6 per cent increase from $136.05 billion the previous year, according to the World Bank’s International Debt Report 2026.

The figures, released in the comprehensive report, show Africa’s largest economy has seen its foreign obligations expand by roughly $61.8 billion—or about 74.3 per cent—over the past decade, from $83.21 billion in 2015. The stock comprises $62.4 billion in public and publicly guaranteed (PPG) debt, $54.48 billion in private non-guaranteed debt, and $28.14 billion in short-term external obligations.

China remains Nigeria’s dominant bilateral creditor. Outstanding bilateral loans to Beijing stood at $5.67 billion as of end-2025, accounting for approximately 85 per cent of the country’s $6.68 billion total bilateral external debt. France ranked a distant second with $774 million, while other bilateral lenders held $237 million.

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Within the $62.4 billion PPG portfolio, multilateral institutions held the largest share at $31.37 billion. The World Bank’s International Development Association (IDA) accounted for $18.53 billion of that, International Monetary Fund Special Drawing Rights allocations for $5.52 billion, and other multilaterals the remainder. Private creditors were owed $24.35 billion.

Debt sustainability indicators present a mixed picture. Nigeria’s external debt-to-exports ratio stood at 212 per cent in 2025, while external debt relative to Gross National Income was 51 per cent. Both ratios improved modestly from 2024 levels. However, the debt-service burden intensified: external debt service absorbed 19 per cent of export earnings (up 9.6 per cent) and equivalent to 5 per cent of GNI.

The report also highlighted the sharp difference in borrowing costs. New commitments from official creditors carried an average interest rate of 1.9 per cent in 2025, compared with 9.6 per cent from private creditors—underscoring the higher price of commercial financing.

The rise in external obligations comes as the Tinubu administration seeks National Assembly approval for an additional $7.7 billion in foreign financing to help cover the 2026 budget deficit. That request forms part of a broader ₦29.2 trillion new-borrowing plan in the Appropriation Act, alongside ₦18.4 trillion in domestic borrowing.

Analysts note that while concessional multilateral and bilateral financing has helped moderate average costs, the growing stock and rising service payments continue to constrain fiscal space, particularly amid persistent foreign-exchange pressures and infrastructure needs. The World Bank report places Nigeria’s trajectory within a broader trend of elevated debt-service burdens across low- and middle-income countries, which collectively paid a record $1.4 trillion in external debt service in 2025.