Nigeria’s external debt service bill fell by 31.5 per cent to $954.06 million in the first quarter of 2026, down from $1.39 billion recorded in the corresponding period of 2025, according to the latest data from the Debt Management Office (DMO).
The decline was largely driven by a significant reduction in principal repayments, which more than offset increases in other charges during the period.
The Q1 2026 external debt-service payment comprised $308.33 million in principal repayments, $623.22 million in interest payments and $22.50 million in other charges.
In comparison, Nigeria paid $759.58 million in principal during Q1 2025, indicating a substantial reduction in the amount of debt principal settled in the latest quarter.
Despite the overall decline, interest payments remained the largest component of Nigeria’s external debt obligations, accounting for about two-thirds of the total amount paid during the three-month period.
Commercial creditors take largest share
Commercial creditors received the largest share of Nigeria’s external debt-service payments in Q1 2026, accounting for $501.84 million.
They were followed by multilateral creditors with $271.90 million, while bilateral creditors received $180.32 million.
Of the $501.84 million paid to commercial creditors, interest accounted for $476.86 million.
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The Eurobond was responsible for the largest portion, accounting for $427.72 million in interest payments.
First Abu Dhabi Bank also received $47.72 million in interest, alongside $20.56 million in other charges, bringing total payments to the bank during the quarter to $68.28 million.
Multilateral obligations
Nigeria’s payments to multilateral creditors stood at $271.90 million during the quarter.
The amount comprised $176.34 million in principal repayments, $95.53 million in interest and $30,107.78 in other charges.
The International Development Association (IDA) accounted for the largest portion of multilateral debt service, receiving $243.42 million.
Of the IDA payment, $156.94 million went towards principal repayments, while $86.47 million represented interest.
Bilateral creditors received $180.32 million, with the Export-Import Bank of China accounting for $174.84 million of the total.
Sharp quarterly decline
Nigeria’s Q1 2026 external debt-service bill also fell sharply compared with the preceding quarter.
The country spent $1.80 billion servicing external debt in Q4 2025, meaning the Q1 2026 figure represented a 47 per cent decline.
The DMO attributed much of the quarterly difference to the absence of a major Eurobond principal repayment.
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Nigeria had made a $1.12 billion Eurobond principal repayment in Q4 2025, significantly increasing that quarter’s external debt-service obligations.
Overall debt burden remains high
Although external debt-service payments declined in Q1 2026, Nigeria’s broader debt-service burden remains substantial.
Total debt service rose to approximately N16.26 trillion in 2025, compared with N7.79 trillion in 2023, reflecting the growing cost of servicing both domestic and external obligations.
Quarterly debt service reached a record N4.86 trillion in Q4 2025, representing a 37.86 per cent increase from N3.52 trillion in Q3 2025 and 49.93 per cent above the N3.24 trillion recorded in Q4 2024.
The figures highlight the increasing pressure that debt servicing is placing on government finances, particularly as domestic interest payments continue to account for a significant portion of the overall burden.
As of March 31, 2026, Nigeria’s total public debt stood at N159.35 trillion, compared with N159.28 trillion at the end of December 2025.
While the overall debt stock remained relatively stable during the quarter, concerns persist over Nigeria’s capacity to generate sufficient revenue to meet its obligations without continued reliance on borrowing.
The Nigerian Economic Summit Group has warned that the country remains exposed to significant debt risks despite improvements in some fiscal indicators.
The group identified weak revenue generation, persistent structural imbalances and continued reliance on borrowing to finance budget deficits and public expenditure as key vulnerabilities.
The DMO has also noted that the country’s debt portfolio remained broadly stable, although there has been a slight shift towards domestic borrowing.
The Q1 2026 figures therefore provide some relief on the external debt front, particularly compared with the heavy repayment obligations recorded in late 2025. However, the broader debt-service picture remains challenging, with rising domestic interest costs continuing to place pressure on government finances.