Nigeria’s external debt stock rose to approximately $145.02 billion in 2025, representing a 6.6 per cent increase from the $135.99 billion recorded in 2024, according to the World Bank’s International Debt Report 2026.

The increase highlights the country’s growing exposure to foreign borrowing and raises concerns about the long-term implications of debt servicing, economic stability and the resources available for future generations.

The World Bank report, published in November 2026, showed that Nigeria’s external debt increased by approximately $9.03 billion within one year. Over the past decade, the country’s external debt has grown by about 74.3 per cent, from $83.21 billion in 2015.

However, the $145.02 billion figure covers external debt across different sectors of the Nigerian economy, including government and private-sector borrowing. It should not be interpreted as the Federal Government’s external debt alone.

According to the report, public and publicly guaranteed external debt accounted for approximately $62.4 billion, while private non-guaranteed debt stood at $54.48 billion. Short-term external debt was estimated at $28.14 billion.

Beyond the increase in the total debt stock, the World Bank raised concerns about the rising cost of servicing external obligations, particularly as developing countries increasingly rely on private creditors.

Nigeria’s external debt service payments relative to exports increased to 19 per cent in 2025, compared with approximately 17.6 per cent in 2024.

The country’s external debt-to-exports ratio, however, declined from 221.4 per cent to 211.9 per cent, while external debt relative to Gross National Income fell from 55.1 per cent to 51.5 per cent.

These indicators suggest that although Nigeria’s external debt stock increased, some measures of its capacity to manage the debt improved. Nevertheless, the rising proportion of export earnings required for debt servicing remains a concern.

The report also highlighted the difference between borrowing from official creditors and private lenders. In 2025, new loans from official creditors carried an average interest rate of 1.9 per cent, compared with 9.6 per cent for private creditors.

This difference demonstrates the potentially higher cost of accessing commercial international financing.

The World Bank’s figures show that Nigeria’s external borrowing comes from different sources, including multilateral institutions, bilateral lenders and private creditors.

China remains Nigeria’s largest bilateral creditor, with approximately $5.67 billion owed to the country.

Within multilateral borrowing, the International Development Association (IDA), a World Bank institution that provides concessional financing to developing countries, accounted for about $18.53 billion.

Private creditors, including international bondholders, also account for a substantial portion of Nigeria’s external debt.

The report further disclosed that Nigeria raised $2.3 billion through an international bond issuance in 2025, comprising a 10-year bond carrying an interest rate of 8.625 per cent and a 20-year bond with an interest rate of 9.125 per cent.

Nigeria’s increasing external debt raises questions about the financial obligations that future governments and generations may inherit.

Although borrowing is not necessarily harmful, its impact depends largely on how the funds are utilised and whether the investments generate sufficient economic returns to support repayment.

When loans are invested in productive sectors such as transportation, electricity, education, healthcare and manufacturing, they can improve economic growth, create employment and expand government revenue.

However, borrowing to finance recurrent expenditure, inefficient projects or activities that generate little economic value could leave future administrations with substantial repayment obligations without corresponding economic benefits.

Rising debt-servicing costs could also reduce the resources available for essential public services.

For instance, money that could have been allocated to building schools, equipping hospitals, improving roads and expanding electricity infrastructure may increasingly be required to meet interest and principal repayment obligations.

The challenge is particularly important for Nigeria because of its dependence on crude oil exports, which exposes government revenue to fluctuations in international oil prices.

A decline in oil earnings could make it more difficult for the country to meet its external obligations without additional borrowing, increased taxation or reductions in public spending.

Nigeria’s debt situation reflects a wider challenge facing developing economies.

The World Bank’s International Debt Report 2026 showed that the external debt stock of low- and middle-income countries increased by 5.5 per cent to a record $9.4 trillion in 2025.

The report also disclosed that debt-servicing payments among these countries reached approximately $1.4 trillion, reflecting the growing cost of borrowing.

The World Bank warned that expensive financing could leave developing countries with fewer resources for long-term development, even as access to international financial markets improves.

It noted that private creditors generally charge significantly higher interest rates than official lenders, increasing the financial burden on countries that depend heavily on commercial borrowing.

The increase in external debt highlights the need for stronger debt management, transparency and accountability in the utilisation of borrowed funds.

Nigeria must ensure that new loans are directed towards projects capable of generating economic returns, expanding government revenue and improving citizens’ living standards.

The government must also strengthen its non-oil revenue base, improve tax administration, expand exports and reduce dependence on foreign borrowing to finance budget deficits.

Equally important is the need for greater transparency in public borrowing, including clear disclosure of loan conditions, repayment schedules, interest rates and the projects financed through borrowed funds.

The Debt Management Office (DMO) publishes regular information on Nigeria’s public debt profile, including external and domestic obligations. Its figures should be distinguished from the World Bank’s broader external debt estimates, which include private-sector borrowing.

Ultimately, Nigeria’s $145 billion external debt figure is more than a financial statistic. It highlights the importance of decisions made today in determining the country’s economic opportunities and financial responsibilities in the years ahead.

For future generations, the critical question is not simply how much Nigeria owes, but whether the money borrowed today will create enough economic value to make repayment sustainable tomorrow.