Nigeria spent $1.82 billion servicing external debt in the first half of 2026, down 21.5% from $2.32 billion in the same period of 2025, even as interest payments to creditors, especially Eurobond investors, increased.
Data from the Debt Management Office (DMO) show that the Federal Government’s payments between January and June 2026 covered principal repayments, interest, and other charges owed to multilateral, bilateral, and commercial creditors.
Although total debt-service payments declined, they still underline the cost of Nigeria’s external borrowing.
The country’s external debt stock rose to $106.43 billion in H1 2026, compared with $92.96 billion in the same period of the previous year.
What the data show
Interest payments rose to $1.11 billion in H1 2026 from $993.95 million in H1 2025, representing a 12.2% year-on-year increase, or about $121 million.
Interest accounted for 61.1% of Nigeria’s external debt-service payments in H1 2026, highlighting the rising cost of maintaining external financing obligations.
- Principal repayments stood at $648.09 million, or 35.5% of total external debt service.
- This was 50.7% lower than the $1.31 billion paid as principal in H1 2025.
Other charges and fees rose sharply to $61.75 million in H1 2026, up 281.2% from $16.20 million in H1 2025.
Creditor categories: who received the most
Multilateral creditors received the largest share
Multilateral institutions received the highest volume of debt-service payments in the first half of the year, reflecting their position among Nigeria’s major external creditors.
- Nigeria paid $676.12 million to multilateral lenders between January and June 2026, representing 37.05% of total external debt service and making them the largest recipient category for the period.
- Total multilateral debt service fell 50.16% from $1.36 billion a year earlier, largely due to a 62.9% drop in principal repayments to $414.61 million.
The International Development Association (IDA) remained the largest recipient among multilateral institutions.
- The IDA, the World Bank’s concessional lending arm, received $448.28 million, or about 24.6% of total external debt service.
- This was 29.26% higher than the $346.81 million recorded in H1 2025, reflecting Nigeria’s growing exposure to World Bank financing.
- The African Development Bank received $127.24 million, while the International Bank for Reconstruction and Development received $44.42 million.
- Payments to the International Fund for Agricultural Development rose 84.24% to $16.56 million from $8.99 million in H1 2025.
- Other multilateral creditors, including the Arab Bank for Economic Development in Africa and the Islamic Development Bank, also recorded sharp increases of 781.17% and 83.2%, respectively.
These payments reflect obligations to institutions that finance infrastructure, social protection, agriculture, energy, healthcare, and other development programmes.
Commercial creditors absorbed the largest interest payments
Commercial creditors, including Eurobond investors and syndicated lenders, recorded higher overall debt-service receipts, which rose 19.39% to $827.54 million.
This represented 45.4% of total external debt-service payments, making commercial creditors the largest category by receipts.
- Interest payments on commercial debt, largely driven by Eurobonds, increased by 11.7%.
- Eurobond investors received $645.16 million, making them the single largest creditor group by debt-service payments.
- Eurobond payments accounted for 35.4% of Nigeria’s total external debt service in the first half of the year.
- However, total payments to Eurobond holders fell 6.2% year-on-year from $687.80 million in H1 2025.
- Nigeria also made sizeable payments to syndicated lenders, including:
- First Abu Dhabi Bank: $101.67 million
- Afreximbank: $36.77 million
- UniCredit SPA: $6.62 million (349.78% increase from $1.47 million in H1 2025)
- Deutsche Bank AG: $13.07 million (250.63% increase from $3.73 million in H1 2025).
- Standard Chartered Bank: $1.62 million (922.54% increase from $158,565 in H1 2025).
The growing role of syndicated facilities suggests Nigeria is gradually diversifying its funding sources beyond traditional development partners.
Bilateral debt-service payments rose despite China’s smaller share of debt stock
Nigeria paid a total of $321.14 million to bilateral creditors during the first half of 2026, representing a 16.7% increase from $275.08 million in H1 2025.
- This accounts for 17.6% of Nigeria’s total external debt service, fueled by an 18.0% growth in principal repayments and a 14.2% rise in interest.
- The largest beneficiary remained the Export-Import Bank of China, which received $245.78 million, accounting for 76.55% of all bilateral debt service payments.
- The Agence Française de Développement (AFD) received $47.02 million, while the China Development Bank received $13.04 million.
- Notably, payments to the China Development Bank nearly doubled by 96.39% to from $6.64 million, reflecting the growing repayment obligations attached to those facilities.
- Repayment to Japan International Cooperation for Africa (JICA) saw the sharpest percentage rise at 543.1% to $395,912.
These payments reflect obligations to partners that have financed transportation, energy, infrastructure, and other development projects in Nigeria.
Chinese financing has supported railway and other infrastructure projects, while French and German development institutions have backed development-focused programmes.
What you should know
Nigeria’s external debt service payments declined to $1.82 billion in H1 2026, down 21.5% year-on-year from $2.32 billion in H1 2025, largely due to a sharp drop in principal repayments.
- Principal repayments fell from $1.31 billion to $648.1 million, a decline of 50.7%, helping to reduce the country’s overall external debt service burden despite a rise in outstanding external debt.
- However, interest costs continued to trend upward. Interest payments rose to $1.11 billion in H1 2026 from $993.9 million a year earlier, representing a 12.2% increase and accounting for more than 61% of total debt service payments during the period.
- The data also shows that commercial creditors remained the most expensive category to service, receiving $827.5 million, or 45.4% of total external debt service payments, driven largely by Eurobond interest payments of $645.2 million.
- Meanwhile, multilateral creditors received $676.1 million, while bilateral creditors received $321.1 million, reflecting Nigeria’s continued dependence on development partners and bilateral lenders for external financing.
The decline in overall debt service payments provides some relief for government finances, but the sustained increase in interest obligations highlights a growing challenge. As borrowing costs rise, debt sustainability will increasingly depend on stronger revenue generation, improved foreign exchange earnings, and ensuring that borrowed funds translate into productive economic returns.