Federal Government Spends Nearly $3 Billion on Eurobond Debt Servicing in Two Years, With 83% Consumed by Interest

Nigeria’s fiscal commitment to its commercial foreign debt obligations has been revealed to be intensely costly, with the Federal Government spending approximately $2.93 billion on servicing Eurobonds across eight quarters under the current administration. The data, covering the period from the third quarter of 2023 to the second quarter of 2025, was derived from the Debt Management Office (DMO) external debt service records.

The analysis, published today, Monday, November 17, 2025, shows that Eurobond obligations represent a substantial part of the nation’s foreign debt burden, accounting for 31.5 per cent of Nigeria’s total external debt service of $9.32 billion over the two years.

More concerning than the total amount is the breakdown of the payments. Of the $2.93 billion spent on Eurobonds, a massive $2.43 billion, or 83 per cent, went toward paying interest charges alone, while only $500 million was used to reduce the actual debt principal.

High Cost of Commercial Borrowing

The data clearly illustrates the costliness of commercial borrowing for Nigeria, as the recurring interest payments significantly limit the government’s fiscal flexibility and capacity to fund critical development projects.

The largest payment spike occurred in Q3 2023, the first full quarter under President Tinubu, where a total of $943.66 million was spent on Eurobond obligations. This included a $500 million principal redemption, alongside $443.66 million in interest. In that quarter, Eurobonds accounted for a staggering 67.8 per cent of the entire foreign-debt bill.

Even in quarters without principal redemption, interest payments remained substantial, continually consuming a large portion of the external debt service budget. For example, Eurobond interest payments surged to $427.72 million in Q1 2025, highlighting the growing weight of interest charges on Nigeria’s finances. The sustained high volume of interest payments suggests that the weight of commercial debt will remain a dominant challenge for the government’s fiscal operations for the foreseeable future.