Nigeria owed foreign creditors $145 billion at the end of 2025, a 6.6 percent rise on the year, and the World Bank’s latest debt report shows the country is leaning more heavily on expensive market financing even as some of its debt ratios improve.
The International Debt Report 2026 puts the country’s external debt at $145 billion, up from $83.2 billion in 2015, an increase of about 74 percent in ten years. Roughly $62.4 billion is owed by the government and by entities it guarantees, $54.5 billion by private borrowers without a state guarantee, and $28.1 billion is short-term debt.
On the public side, about half the debt is owed to multilateral institutions, with the World Bank’s International Development Association alone holding $18.5 billion. Private creditors account for $24.4 billion. China is Nigeria’s largest bilateral lender at $5.7 billion.
Loans from official lenders signed in 2025 carried an average interest rate of 1.9 percent and a maturity of 25 years. Loans from private creditors averaged 9.6 percent over 12 years. Nigeria’s dual-tranche Eurobond, worth $2.3 billion, was priced at 8.625 percent for ten years and 9.125 percent for 20 years, and the report lists the country as the third-largest government issuer in Sub-Saharan Africa last year.
Some indicators moved in the right direction. External debt stood at 51 percent of national income, down 6.6 percent from a year earlier, and at 212 percent of export earnings, down 4.3 percent. Both ratios improved on their 2024 levels.
The cost of servicing the debt, however, is rising. Debt service took 19 percent of export earnings in 2025, up 9.6 percent from the previous year, and equalled 5 percent of national income, up 6.9 percent. In plain terms, a larger share of the foreign currency Nigeria earns is going to creditors.
The report also flags a newer form of financing. Nigeria arranged a $5 billion total return swap in 2026, a three-year arrangement backed by domestic government securities worth about 133 percent of the amount received, or roughly $6.7 billion.
The report describes such structures as able to “blur the distinction” between a derivative and conventional borrowing, and cautions that they carry “collateral requirements, margin-call, refinancing, and transparency risks”. It adds that headline debt statistics may not fully reveal how much collateral has been pledged.
The IMF urges governments to manage the currency, maturity and refinancing risks in their debt portfolios and to avoid short-term solutions that are “less transparent” during periods of stress. Nigeria’s debt ratios eased in 2025, but the price it pays for new money is climbing.
