Nigeria’s debt rises to N74.38trn, $44.9bn despite IMF loan repayment

Nigeria’s recent repayment of its loan to the International Monetary Fund (IMF) has been hailed as a demonstration of fiscal discipline. However, this milestone has done little to ease the country’s broader debt challenges.

As of December 2024, Nigeria’s total public debt stood at a staggering N74.38 trillion in domestic debt and $44.9 billion in external obligations, according to the latest data released by the Debt Management Office (DMO). Data for the first quarter of 2025 is still pending.

Nigeria’s domestic debt profile is overwhelmingly skewed towards instruments issued by the Federal Government, particularly long- and short-term securities. The composition as of December 2024 is as follows: FGN Bonds: N55.44 trillion; Nigerian Treasury Bills: N12.35 trillion; Other Domestic Instruments: N3.97 trillion; Promissory Notes: N1.54 trillion; FGN Sukuk Bonds: N992.56 billion

FGN Bonds alone account for nearly 75% of all domestic borrowing, illustrating the government’s continued reliance on the local bond market to finance persistent budget deficits.

While Nigeria has successfully repaid the principal amount of its IMF facility, its foreign debt profile remains sizable and complex. The external debt burden of $44.9 billion is dominated by both commercial and multilateral loans. The top five creditors are: Eurobond Holders: $17.32 billion; World Bank (IDA): $16.56 billion; Exim Bank of China: $5.06 billion; African Development Bank (AfDB): $2.10 billion; IBRD (World Bank): $1.24 billion.

READ ALSO: Nigeria clears IMF debt, exits debtor list in major economic milestone

Nigeria’s heavy exposure to Eurobonds, which are commercial loans issued on international capital markets, translates to higher interest payments and increased refinancing risk, especially in a global environment of elevated interest rates.

Despite settling the IMF loan’s principal, Nigeria remains obligated to make annual service charge payments of around $30 million (in Special Drawing Rights) through 2029. These are standard administrative fees tied to IMF facilities and reflect ongoing financial obligations.

Analysts say the repayment has helped improve Nigeria’s image in international financial circles, potentially easing future bilateral and multilateral loan negotiations.

However, that goodwill will be tested by the country’s overall debt sustainability metrics.

Though the IMF loan repayment marks a notable achievement, experts emphasize that Nigeria’s debt trajectory remains concerning. Without structural reforms, the country could face mounting pressure from rising debt service costs and limited fiscal space for essential public investments.

“Debt can be a catalyst for development,” one analyst noted, “but only if it is used strategically and managed with transparency and prudence.”

As Nigeria navigates a challenging fiscal landscape, the choices made today will determine whether the nation’s borrowing translates into long-term prosperity—or deeper economic vulnerability.