EXTERNAL DEBT service surged by 49.2 percent year-on-year to $2.01 billion in the first four months of 2025, up from $1.34 billion in the same period of 2024.
The data, released by the Central Bank of Nigeria, underscores the growing strain on the nation’s public finances amid persistent foreign exchange constraints and a weakened revenue base.
The sharp increase signals mounting pressure as the country struggles to meet its international financial obligations.
This rise in payments also reinforces warnings by the International Monetary Fund, which earlier flagged Nigeria’s deteriorating debt sustainability, attributing it to structural fiscal imbalances.
Projections by the IMF estimate Nigeria’s fiscal deficit will grow wider in 2025 and 2026, with the government expected to spend approximately 4.5 percent more than it earns in both years.
This represents a sharper deficit than the -3.4 percent recorded in 2024, measured as a percentage of Gross Domestic Product.
The General Government Overall Balance, a key fiscal indicator, captures the difference between total government revenue—including oil income, taxes, and other streams—and total expenditure, such as wages, infrastructure costs, and debt interest payments. A negative balance reflects the shortfall the government must cover, often through borrowing.
Rising fiscal deficits have prompted economists to warn of deeper borrowing requirements, which could accelerate Nigeria’s debt accumulation.
Increasing reliance on loans, especially under high-interest conditions or in the face of declining investor confidence, risks worsening the nation’s financial vulnerability.
With revenues faltering and deficits expanding, Nigeria faces a tightening fiscal outlook.
Analysts caution that unless structural reforms are implemented to boost income and curtail non-essential spending, the burden of debt servicing may continue to escalate, crowding out essential development spending and deepening long-term economic risk.
