World Bank flags costly borrowing as Nigeria’s external debt hits $145bn

Nigeria’s external debt rose 6.6 per cent to $145.02bn at the end of 2025, the World Bank’s International Debt Report 2026 shows, up about $61.8bn in a decade. Debt-service ratios worsened despite improvements in debt-to-income measures, with private creditors charging far higher rates than official lenders. The bank also warned of transparency and collateral risks in Nigeria’s $5bn Total Return Swap, urging governments to disclose full terms of such arrangements.

Nigeria’s external debt stock rose 6.6 per cent to $145.02bn at the end of 2025, according to the World Bank’s International Debt Report 2026, Daily Trust reports.

The figure is about $61.8bn higher than the $83.21bn recorded in 2015. It comprises $62.4bn in public and publicly guaranteed debt, $54.476bn in private nonguaranteed debt and $28.139bn in short-term obligations.

Although debt-to-exports and debt-to-GNI ratios fell, the debt-service-to-exports ratio rose 9.6 per cent to 19 per cent, while debt service relative to GNI rose 6.9 per cent to five per cent.

The report noted that Nigeria’s 2025 bond issuance of $2.3bn carried rates of 8.625 per cent and 9.125 per cent. Private creditors charged an average of 9.6 per cent on new commitments, against 1.9 per cent from official lenders.

It also flagged Nigeria’s $5bn Total Return Swap in 2026, warning of collateral, margin-call and transparency risks. World Bank Chief Statistician Haishan Fu said: “Low- and middle-income countries are borrowing more, paying more, and, in many cases, leaving less for long-term development.”