Nigeria’s total debt service payments fell significantly from $540 million in January 2025 to $276 million in February 2025, marking a substantial decline in external debt obligations, according to the latest data from the Central Bank of Nigeria (CBN).
The sharp drop comes as the federal government intensifies efforts to restructure its debt portfolio, boost dollar liquidity, and ease pressure on the foreign exchange market. Analysts suggest that debt repayment deferrals and ongoing negotiations with multilateral lenders may have contributed to the reduced outflows for the month.
While debt service payments declined, the issuance of Letters of Credit (LCs) surged, signaling increased trade activities. The CBN report revealed that LCs totaled $95.6 million in February, representing a 48% rise from $64.6 million in January 2025. This suggests that import-related activities are rebounding as businesses adjust to fluctuating exchange rates and government policies aimed at stabilizing trade financing.
President Bola Tinubu recently announced that in the first 17 months of his administration, Nigeria’s revenue-to-debt service ratio had declined from 97% to 65%, reflecting improved fiscal management.
The Debt Management Office (DMO) reported that despite the recent decline, debt service payments surged by 69% in 2024, reaching ₦6.04 trillion in the first half of the year, compared to ₦3.58 trillion in the same period of 2023.
As the CBN focuses on stabilizing the naira and managing external obligations, the federal government continues to engage global lenders and investors to ease Nigeria’s growing debt burden. The latest data suggests cautious optimism, as the country balances fiscal sustainability with economic growth.
