By Ayomide Otitoju
Nigeria’s external debt servicing costs surged by 49 per cent year-on-year in the first four months of 2025, with the Federal Government spending approximately $2.01 billion, according to the latest international payments data released by the Central Bank of Nigeria (CBN).
The figure marks a significant increase from the $1.33 billion recorded during the same period in 2024.
External debt repayments accounted for a dominant 77.1 per cent of Nigeria’s total international payments between January and April 2025 — a steep rise from 64.5 per cent in the corresponding period last year. Total international payments, which include remittances and letters of credit, climbed to $2.60 billion, up from $2.07 billion in 2024.
A breakdown of the monthly debt servicing figures shows a fluctuating but upward trend. In January 2025, Nigeria paid $540.67 million, slightly down from $560.52 million in January 2024. February payments remained largely unchanged at $276.73 million, compared to $283.22 million in the same month last year.
However, a sharp spike was recorded in March, with debt servicing costs hitting $632.36 million — more than double the $276.17 million spent in March 2024. The rising trajectory continued into April, with repayments reaching $557.79 million, a 159 per cent jump from $215.20 million in April 2024.
The increase in debt servicing follows confirmation by the International Monetary Fund (IMF) that Nigeria has fully repaid the $3.4 billion loan received under the Rapid Financing Instrument (RFI) in 2020. The loan was part of emergency support to cushion the economic shocks of the COVID-19 pandemic and the global oil price crash.
In a statement on behalf of the IMF Resident Representative in Nigeria, Christian Ebeke, the Fund confirmed that the repayment was completed as of April 30, 2025.
“As of April 30, 2025, Nigeria has fully repaid the financial support of about $3.4 billion it requested and received in April 2020 from the International Monetary Fund under the Rapid Financing Instrument,” the statement read.
Although the principal has been repaid in full, Nigeria will continue to incur annual charges related to Special Drawing Rights (SDR), amounting to around $30 million. These fees arise from the gap between Nigeria’s current SDR holdings, which stand at SDR 3,164 million ($4.3 billion), and its total allocation of SDR 4,027 million ($5.5 billion). The charges, tied to the SDR interest rate, will continue until the holdings align with the cumulative allocation.
The rising cost of debt servicing has renewed concerns about Nigeria’s fiscal sustainability amid ongoing efforts to stabilise the economy and manage its growing debt burden.
