Fitch, a global rating agency, has projected that Nigeria’s external debt service bill will increase to $5.2 billion this year.
According to the Debt Management Office (DMO), Nigeria’s external debt service was $1.07 billion as at December 2024.
In its rating commentary on Nigeria, published on April 11, the credit rating firm said the service bill would rise further in 2025.
“Government external debt service is moderate but expected to rise to USD5.2 billion in 2025 (with USD4.5 billion of amortisations, including a USD1.1 billion Eurobond repayment due in November 2025), from USD4.7 billion in 2024, and fall to USD3.5 billion in 2026,” Fitch said.
According to the firm, there was a minor delay in paying a coupon due on March 28 on Nigeria’s sovereign $4 billion eurobond, highlighting public finance management challenges.
Fitch also predicted that general government debt would remain at about 51 percent of gross domestic product (GDP) in 2025 and 2026.
“We expect GG debt/GDP to decline marginally in 2025-2026, to 51%, in line with our ‘B’ median due to strong nominal GDP growth,” Fitch said.
“Nigeria’s public debt has a fairly long average maturity of 10.9 years, and over half is local-currency denominated (‘B’ median of 37%).”
The agency also projected that government revenue/GDP will rise, but remain structurally low — averaging 13.3 percent in 2025-2026.
Fitch said the upswing will largely account for a high government “interest/revenue ratio, above 30% (‘B’ median 13.2%), with Federal government (FG) interest/FG revenue ratio, nearly 50%”.
“Banks’ ample liquidity and strong demand for government securities should support domestic financing capacity,” the agency said.
Fitch had upgraded Nigeria’s credit rating from negative to stable.