Nigeria’s debt servicing obligations surged by 49.2% year-on-year in the first four months of 2025, reaching $2.01 billion, up from $1.34 billion recorded during the same period in 2024. This sharp increase was revealed in the Central Bank of Nigeria’s (CBN) latest International Payments data.
The development underscores the mounting pressure the country faces in meeting its external debt obligations, exacerbated by persistent foreign exchange challenges and a fragile revenue base. Analysts warn that this trend highlights Nigeria’s deepening fiscal vulnerabilities.
The rising debt burden aligns with concerns earlier raised by the International Monetary Fund (IMF), which flagged Nigeria’s debt sustainability as being at risk due to ongoing fiscal weaknesses. The IMF projected that Nigeria’s fiscal deficit would widen, with government spending expected to exceed revenue by 4.5% in both 2025 and 2026. This represents a more severe shortfall compared to 2024, when the General Government Overall Balance stood at -3.4% of GDP.
The General Government Overall Balance is a critical measure of fiscal health, calculated as the gap between a government’s total revenue (from taxes, oil sales, and other sources) and its total expenditures (including wages, infrastructure, subsidies, and debt interest payments). A sustained deficit signals that the government is spending far more than it earns, necessitating increased borrowing.
Analysts caution that continued reliance on debt to finance the growing shortfall could further strain public finances, especially if borrowing costs rise due to high interest rates or waning investor confidence. As revenues dwindle and deficits grow, Nigeria’s dependence on borrowing is expected to increase, compounding the national debt and elevating the risk of fiscal instability.
