NIGERIA may be getting several things wrong but it is resilient when it comes to taking debt and repaying it, especially at rates that can be considered prohibitive.
In the first quarter (Q1) of 2025, Africa’s most populous nation, repaid $759.577 million borrowed from international lenders, including the African Development Bank (AfDB), Exim Bank of China, World Bank agencies, among others, at the cost of $1.39 billion, according to the Debt Management Office (DMO) document seen by Economy Post.
In other words, Nigeria’s debt servicing on the loan stood at 83.4 percent, which was nearly double of what was borrowed. It was not stated when the loans were taken, but debt servicing on the $759.577 million was $633.164 million, according to Economy Post’s findings.
As of the Q1 of 2025, Nigeria owed $45.98 billion, including to nations such as Germany, India, France, China and Japan.
Rising debt
Nigeria’s total public debt stood at N149.388 trillion. The Bola Ahmed Tinubu administration and states borrowed nearly N96 trillion in two years, sending shockwaves among citizens, Economy Post exclusively reported earlier.
By the 23rd month of Mr Tinubu’s tenure, the nation’s debt had soared to N56.6 trillion. Mr Tinubu’s debt in 23 months was N18.7 trillion or 75.2 percent less than N75.26 trillion loans taken by former President Muhammadu Buhari in the whole of 8 years. Under President Tinubu, Nigeria’s public debt had jumped from N87.379 trillion as at June 2023 (one month after Mr Buhari’s exit from power) to N142.319 trillion as at September 2024. The debt reached N144.67 trillion ($94.23 billion) in December 2024.
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High cost of external debt
Economists are worried about the high debt repayment or servicing impact of Nigeria’s external loans. They say that the servicing cost would simply be humoungous for the external loans in the face of naira devaluation. The naira has weakened by more than 50 percent in two years, with inflation and cost of living hitting roof tops.
“The naira is devalued. So, when you take loans in currencies that are far stronger than yours, you pay more in your local currency and you also deplete your reserves. The naira, in turn, suffers,” said a Lagos-based economist, Mr Vincent Odinkalu.
Odinkalu’s assertion is true. If Nigeria’s total external debt in 2020 was $46.98 billion as it is today, the nation would be repaying 4 times less. The exchange rate was less than N500/$ in 2020. Mr Odinkalu said the nation would dip its hands in the foreign reserves to repay and service the loans, expressing shock on President Tinubu’s level of borrowing while advising him to look inwardly.
“Domestic loans are far better, but the challenge is whether we can mobilise that amount of money locally. However, the president must look for ways to raise more revenues from local sources,” he added.
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BudgIT, which provides in-depth reports on Nigeria’s budgets, said in a recent report: “The federal government’s borrowings increased by 658% between 1999 and 2021, from N3.55 trillion to N26.91 trillion. This expansion was noticeable when foreign debt increased by more than 291% under former President Muhammadu Buhari’s administrationhttps://budgit.org/nigerias-debt-crisis-how-did-we-get-here/https://budgit.org/nigerias-debt-crisis-how-did-we-get-here/. Following the 2023 general elections, Nigeria’s debt deteriorated significantly, increasing from N49.85 trillion to over N134.30 trillion within a short period. As of September 2024, Nigeria’s public debt totalled N142.3 trillion, equivalent to approximately N624,527 per person.”
Rising poverty
While Nigeria continues to take on debt, the majority of its citizens remain in extremely poverty. The 2022 poverty data by the National Bureau of Statistics (NBS) showed that 63 percent of persons living within Nigeria (133 million people) were multidimensionally poor.
The World Bank said earlier in 2025 that the poverty rate among Nigeria’s rural population stood at an alarming 75.5 percent, implying that three in four individuals residing in rural communities are extremely poor.
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The Nigerian government began the cash transfer scheme 10 months ago, but only one in three of the 15 million households targeted has received the transfers, PwC said.
