KEY POINTS
- Private creditors charged Nigeria an average interest rate of 9.6 per cent on new external loans in 2025, against 1.9 per cent from official lenders.
- Nigeria’s external debt stock increased by 6.6 per cent to $145.02bn in 2025.
- China remained Nigeria’s largest bilateral creditor, while the International Development Association was its biggest multilateral lender.
Nigeria’s external debt profile has come under renewed scrutiny after the World Bank reported that the country paid five times more interest on new loans from private creditors than on borrowing from official lenders in 2025.
The World Bank Group’s latest International Debt Statistics showed that Nigeria’s average interest rate on new private external loans stood at 9.6 per cent, compared with 1.9 per cent for loans from official creditors. The figures highlight the difference in borrowing costs as the country continues to access international financing.
According to the report published by the World Bank, Nigeria’s total external debt stock rose by 6.6 per cent to $145.02bn in 2025. The increase extended a decade-long upward trend, with external debt growing from $83.21bn in 2015. This represents an increase of approximately $61.8bn over the period.
The data also showed differences in the repayment terms offered by the two categories of lenders. Official creditors provided new loans with an average maturity of 25 years and a five-year grace period. Private creditors, meanwhile, offered an average maturity of 12 years and an eight-year grace period.
Private creditors account for significant debt exposure
The World Bank classified Nigeria’s external obligations into $62.40bn in public and publicly guaranteed debt, $54.48bn in private nonguaranteed debt and $28.14bn in short-term debt.
Within public and publicly guaranteed debt, multilateral institutions accounted for $31.37bn, while bilateral creditors held $6.68bn. Private creditors accounted for another $24.35bn.
The International Development Association, the World Bank’s concessional lending arm, was Nigeria’s largest multilateral creditor, with $18.53bn. IMF special drawing rights allocations accounted for $5.52bn, while other multilateral institutions held $7.32bn.
China remained the country’s largest bilateral creditor, with $5.67bn. France followed with $774m, while other bilateral lenders accounted for $237m.
The figures indicate that Nigeria relies on different categories of external financing, with varying costs and repayment conditions. However, the higher interest rates attached to private borrowing can increase the cost of servicing commercial debt, particularly when large amounts fall due.
Debt service pressures remain significant
The report also highlighted Nigeria’s debt service obligations relative to its foreign exchange earnings and national income. Its debt service-to-export ratio stood at 19 per cent, representing a 9.6 per cent increase. Debt service as a proportion of gross national income also rose by 6.9 per cent to five per cent.
However, other indicators moved in the opposite direction. Nigeria’s external debt-to-export ratio declined by 4.3 per cent to 212 per cent, while external debt as a proportion of gross national income fell by 6.6 per cent to 51 per cent.
The figures suggest that improvements in some debt stock indicators did not translate into lower debt service ratios during the period. Nigeria’s $145.02bn external debt stock was measured against a gross national income of $281.70bn and a population of 237.5 million. Commenting on the importance of reliable debt information, World Bank Group Chief Statistician Haishan Fu said the institution had spent more than five decades helping borrowing countries build comparable external debt data.
Fu also highlighted the reconciliation of loan records submitted by borrowing countries with information provided by bilateral creditors. The exercise, which began in 2022, has helped identify discrepancies, validate information and improve the consistency of external debt statistics. He said transparent debt reporting requires cooperation between borrowers and creditors, adding that reliable information supports better-informed decisions on public borrowing and debt management.
