Nigeria’s Debt Hits N166.79tn as Interest Accounts for 56.5% of External Payments

Festus Akanbi

Nigeria’s public debt rose by N7.44 trillion to N166.79 trillion in the second quarter of 2026, even as spending on external obligations fell to $870.73 million, according to Debt Management Office (DMO) figures reported by Nairametrics.

The figures painted a difficult picture for public finances.

Although the quarterly external debt service bill fell by 8.7 per cent, interest alone accounted for $491.73 million, or 56.5 per cent, of the payments made between April and June.

Commercial creditors received $325.70 million during the period, with no principal repayment recorded under that category.

Nigeria’s total debt stock stood at N159.35 trillion at the end of March before rising to N166.79 trillion as of June 30.

The latest figure was equivalent to $120.93 billion and comprised N91.59 trillion in domestic debt and about N75.19 trillion in external debt. Domestic obligations accounted for 54.91 per cent of the portfolio.

The DMO valued the external debt at the Central Bank of Nigeria’s official exchange rate of N1,379.1842 to the dollar on June 30.

The increase in the naira value of the debt stock should therefore be read alongside the dollar-denominated figures; the quarterly rise cannot, on its own, be treated as new borrowing.

The federal government remained the dominant borrower, with N87 trillion in domestic obligations and N65.77 trillion in external debt.

States and the Federal Capital Territory (FCT) owed N4.59 trillion domestically and N9.42 trillion externally.

FGN bonds formed the largest component of federal domestic debt at N64.84 trillion. That amount included N41.47 trillion in naira bonds, N22.11 trillion in securitised Ways and Means advances and a domestic dollar bond valued at N1.27 trillion. Nigerian Treasury Bills accounted for a further N19.48 trillion.

While the overall debt stock climbed, external debt service fell from $954.06 million in the first quarter to $870.73 million in the second, a reduction of $83.33 million.

Principal repayments amounted to $339.75 million, while other charges stood at $39.25 million.

Interest payments, though down from $623.22 million in the preceding quarter, still exceeded principal repayments by $151.98 million.

Multilateral institutions received the largest share of the second-quarter payments at $404.22 million. The International Development Association received $204.86 million, the African Development Bank $127.24 million and the International Bank for Reconstruction and Development $44.42 million.

Payments to commercial creditors consisted of $292.85 million in interest and $32.85 million in other charges. Eurobond interest alone amounted to $217.44 million. Nigeria also made payments under syndication arrangements with Afrexim Bank and First Abu Dhabi Bank, while charges associated with a First Abu Dhabi Bank total return swap stood at $22.50 million.

Bilateral creditors received $140.81 million, including $101.48 million in principal repayments. Exim Bank of China accounted for the largest bilateral payment at $70.94 million, followed by Agence Française de Développement at $45.39 million.

The latest debt stock is nearly double the N87.38 trillion recorded at the end of June 2023. The second-quarter figures show why the composition of Nigeria’s obligations matters as much as their headline value: despite a lower external payment bill, more than half of what the country paid went towards interest rather than reducing principal.