Nigeria’s debt service payments rose by 49.2 percent year-on-year, YoY, to $2.01 billion in the first four months of 2025 (4m’25) from $1.34 billion in the corresponding period of 2024.
The Central Bank of Nigeria’s (CBN) disclosed this in its International Payments data for the period
This development reflects the pressure the country faces in managing its external obligations amidst persistent foreign exchange challenges and a weak revenue base.
The development also confirms the position of the International Monetary Fund, IMF, earlier this year, indicating that the country’s debt sustainability has been threatened by overall fiscal deficiencies.
The IMF had projected that Nigeria’s fiscal deficit will worsen, with the government expected to spend 4.5 percent more than it earns in both 2025 and 2026.
This marks a deeper shortfall compared to 2024, when Nigeria’s General Government Overall Balance stood at -3.4 percent of GDP, according to IMF data.
General Government Overall Balance, expressed as a percent of GDP, is the difference between the government’s total revenues (from taxes, oil sales, and other sources) and its total expenditures (on salaries, infrastructure, subsidies, interest payments, etc.).
The situation reflects a rising fiscal deficit with analysts saying that a persistent and widening deficit means the government will have to borrow more, increasing the national debt burden.
They added that this could strain public finances, particularly if borrowing costs rise due to high interest rates or low investor confidence.
With revenue falling and deficits rising, the government will rely more on borrowing, a situation which will further drive up public debt and fiscal vulnerability.
