The country’s external debt service obligations soared to $1.08 billion in the fourth quarter of 2024, according to the latest data released by the Debt Management Office (DMO) on April 8, 2025. This figure marks a significant increase from the previous quarter, showing the growing burden of foreign debt repayments amidst exchange rate volatility, dwindling foreign reserves, and persistent economic headwinds.
A Sharp Rise in External Obligations.
The $1.08 billion spent on external debt servicing in Q4 2024 represents a notable escalation from the $1.34 billion recorded in Q3, as reported earlier by Nairametrics. While the dollar amount appears to show a decline quarter-on-quarter, the broader context reveals a troubling trend when viewed in naira terms and over the course of the year. Nigeria’s total debt service costs for 2024 have been climbing steadily, driven by a combination of principal repayments and interest obligations on loans from multilateral, bilateral, and commercial creditors.
Breaking down the Q4 figures, multilateral loans emerged as the largest component, accounting for 55.7% of the total debt service, or $600.71 million. The International Monetary Fund (IMF) topped the list of creditors, receiving $407.97 million, the single highest payment to any lender in the quarter. Commercial loans, including Eurobonds, and bilateral creditors followed, though no payments were recorded to key bilateral lenders such as Japan, China Exim Bank, or India Exim Bank during this period.
A Year of Escalating Debt Costs
The Q4 surge caps a year of escalating debt servicing costs for Nigeria. In Q3 2024, the country’s total debt service reached N3.57 trillion (approximately 2.23 billion at the September exchange rate of N1,601.03/), up from N3.51 trillion in Q2. External debt servicing alone in Q3 stood at $1.34 billion, reflecting a 19.44% increase in dollar terms from Q2’s $1.12 billion. The naira’s depreciation has amplified these costs significantly, with the exchange rate weakening further by Q4, exacerbating the burden on government finances.
Analysts attribute this upward trajectory to a combination of factors: rising global interest rates, the naira’s continued slide against the dollar, and Nigeria’s growing external debt stock, which hit $43.03 billion by September 2024 and is expected to rise further with the inclusion of Eurobond proceeds in Q4. The DMO’s data also reveals that Nigeria’s total public debt climbed to N144.67 trillion ($94.23 billion) by December 31, 2024—a staggering 48.58% increase from N97.34 trillion a year earlier—driven by both domestic and external borrowing.
Implications for Fiscal Sustainability
The sharp rise in external debt servicing has reignited concerns about Nigeria’s debt sustainability. With payments to multilateral and commercial lenders dominating the Q4 figures, the country’s dependence on expensive, non-concessional loans is becoming increasingly apparent. Economic experts warn that this trend, coupled with exchange rate volatility and pressure on foreign reserves, could strain Nigeria’s ability to meet future obligations without compromising critical investments in infrastructure, healthcare, and education.
The absence of payments to traditional bilateral creditors like China Exim Bank in Q4—after a hefty $182.04 million payment in Q3—suggests a potential shift in repayment schedules or creditor dynamics. However, the dominance of IMF and Eurobond payments indicates that Nigeria’s debt portfolio is tilting toward higher-cost financing, a move that could prove unsustainable if revenue generation does not keep pace.
Nigeria’s revenue-to-debt-service ratio, a key indicator of fiscal health, has shown some improvement, dropping from 97% in 2023 to 68% in 2024, according to Finance Minister Wale Edun. Yet, the sheer volume of debt servicing—$1.08 billion in a single quarter—continues to consume a significant portion of government revenue, leaving little room for developmental spending. This reality is compounded by the naira’s depreciation, which inflates the local currency cost of foreign debt repayments and erodes purchasing power.
Nigeria’s External Debt Servicing Breakdown for Q4 2024
| Creditor Category | Amount ($ Million) | Percentage of Total | Notes |
| Multilateral Loans | 600.71 | 55.70% | Largest component; includes IMF, World Bank, etc. |
| – International Monetary Fund (IMF) | 407.97 | 37.80% | Single highest payment to any creditor in Q4. |
| – Other Multilateral | 192.74 | 17.90% | Estimated remainder (e.g., World Bank, African Development Bank). |
| Commercial Loans | 479.29 | 44.30% | Includes Eurobonds; estimated based on balance after multilateral loans. |
| Bilateral Loans | 0 | 0.00% | No payments recorded to Japan, China Exim Bank, or India Exim Bank in Q4. |
| Total External Debt Service | 1,080.00 | 100.00% | As reported by the DMO for Q4 2024. |
Key Notes
- Multilateral Loans: The DMO data highlights that multilateral creditors accounted for 55.7% of the total, equating to $600.71 million. The IMF’s $407.97 million payment is explicitly stated, leaving approximately $192.74 million for other multilateral lenders like the World Bank or African Development Bank (calculated as an estimate).
- Commercial Loans: The article does not provide an exact figure for commercial loans (e.g., Eurobonds) in Q4, but this category typically forms a significant portion of Nigeria’s external debt service. The $479.29 million is an estimate derived by subtracting the multilateral total ($600.71 million) from the overall $1.08 billion.
- Bilateral Loans: The article explicitly states no payments were made to key bilateral creditors (Japan, China Exim Bank, India Exim Bank) in Q4, suggesting a pause or rescheduling of these obligations.
- Currency Context: Figures are in U.S. dollars, reflecting external debt obligations. The naira equivalent would vary based on the exchange rate, which weakened further in Q4 2024.
Challenges and Opportunities
As Nigeria grapples with its rising debt burden, the government faces a delicate balancing act. On one hand, external borrowing has been a critical tool for funding budget deficits and infrastructure projects amid chronic revenue shortfalls. On the other, the escalating cost of servicing this debt threatens to undermine long-term economic stability.
Economic analysts have called for urgent measures to address these challenges, including boosting non-oil revenue, enhancing tax collection, and pursuing more concessional loans with favorable terms. The IMF’s projection of a 3.2% GDP growth rate for Nigeria in 2025 offers a glimmer of hope, but this optimism hinges on effective policy reforms and a stabilization of the exchange rate—both of which remain uncertain.
