World Bank puts Nigeria's external debt at $145bn, flags costly borrowing
- Nigeria's external debt rose 6.6% to $145.02bn at the end of 2025, the World Bank says.
- Debt service costs climbed even as debt-to-export and debt-to-income ratios eased slightly.
- The bank also flagged Nigeria's $5bn Total Return Swap and high private lending rates.
Nigeria owed foreign creditors $145.02bn at the end of 2025, up 6.6 per cent from a year earlier, according to the World Bank's International Debt Report 2026 released on Thursday.
The figure is up from $83.21bn in 2015, a rise of about $61.8bn in a decade, the report said.
Of the total, $62.4bn is public and publicly guaranteed debt, $54.476bn is private borrowing without a government guarantee, and $28.139bn is short-term obligations. In other words, government and government-backed borrowing is less than half of the total.
Why it matters for ordinary Nigerians
The report says servicing the debt is getting harder. Nigeria's debt-service-to-exports ratio rose 9.6 per cent in 2025, and debt service relative to gross national income (GNI) rose 6.9 per cent.
At the same time, external debt-to-exports stood at 212 per cent and debt-to-GNI at 51 per cent. Both eased slightly from 2024, but the cost of paying the debt went up.
Money spent on interest is money not spent on roads, schools, hospitals and jobs. The World Bank's chief statistician, Haishan Fu, put it as a paradox: developing countries are borrowing more and paying more, "leaving less for long-term development."
"The objective should, therefore, not be more debt. It should be better financing that is affordable, transparent, sustainable, and capable of supporting investment and growth," Fu said in the report's foreword.
Across low- and middle-income countries, debt-service payments reached $1.4tn in 2025, a fifth straight yearly increase, the bank said.
Bonds and a $5bn swap
Nigeria returned to the international bond market in 2025, raising $2.3bn in two tranches: a 10-year bond at 8.625 per cent and a 20-year bond at 9.125 per cent. It was the third-largest issuer among Sub-Saharan African countries eligible for the World Bank's International Development Association (IDA) financing.
The rates show how expensive private money has become. Nigeria's average interest rate on new official external debt in 2025 was 1.9 per cent, against 9.6 per cent from private creditors, according to the report. Official loans also came with longer maturities, averaging 25 years with a five-year grace period, compared with 12 years and an eight-year grace period for private lenders.
The report also named Nigeria among countries using a Total Return Swap (TRS). Nigeria entered a $5bn TRS in 2026 with a three-year maturity, pledging about $6.7bn in domestic securities as collateral, a ratio of roughly 133 per cent.
The World Bank said such deals can deliver foreign currency quickly, but carry collateral, margin-call, refinancing and transparency risks. It urged governments to disclose the amount borrowed, maturity, collateral and repayment terms, warning that without this the full scale of a country's exposure is hard to see.
What happens next: The report does not say what government will do. Its figures will feed into the debate over how Nigeria funds its budget and how much of its revenue goes to debt service.
