Nigeria’s total debt service payments dropped significantly from $540 million in January 2025 to $276 million in February 2025.
This is according to the Central Bank of Nigeria (CBN)’s latest data on external sector payments.
This decline comes amid ongoing efforts by the federal government to restructure its debt portfolio, improve dollar liquidity, and ease pressure on the foreign exchange market.
The figures, published on the apex bank’s website, highlight the increasing strain of debt obligations on Nigeria’s external reserves and overall fiscal sustainability.
Analysts suggest that recent debt repayment deferrals and negotiations with multilateral lenders may have contributed to the lower outflows for the month.
Surge in Letters of Credit
While debt service payments declined, Letters of Credit (LCs) rose sharply, indicating increased financing of trade transactions.
- The CBN reported that LCs issued in February 2025 totaled $95.6 million, a 48% increase from $64.6 million in January 2025.
- The rise in LCs suggests a recovery in import-related activities, particularly as businesses adjust to the fluctuating naira exchange rate and government policies aimed at stabilizing trade financing.
- Foreign Reserves and Government Measures
- President Bola Tinubu has said in the first 17 months of his administration, Nigeria’s revenue-to-debt service ratio has reduced to 65% from 97%.
The federal government has continued engagements with global lenders and investors to ease Nigeria’s growing debt burden.
The CBN’s monetary policy direction in recent months has focused on stabilizing the naira while balancing external obligations. (Nairametrics)
