Nigeria’s debt service payments have taken a significant plunge, dropping from $540 million in January 2025 to $276 million in February 2025, according to the Central Bank of Nigeria (CBN)’s latest data.
This decline is a welcome relief amid the federal government’s ongoing efforts to restructure its debt portfolio, boost dollar liquidity, and alleviate pressure on the foreign exchange market.
Analysts attributed the lower debt service payments to recent debt repayment deferrals and negotiations with multilateral lenders. Also, the government’s efforts to restructure its debt portfolio and improve dollar liquidity have contributed to this positive trend.
While debt service payments decreased, Letters of Credit (LCs) issued in February 2025 rose sharply to $95.6 million, representing a 48% increase from January 2025. This surge indicates increased financing of trade transactions and suggests a recovery in import-related activities.
Meanwhile, President Bola Tinubu also confirmed a significant reduction in Nigeria’s revenue-to-debt service ratio, from 97% to 65%, over the first 17 months of his administration.
The federal government continues to engage with global lenders and investors to ease Nigeria’s growing debt burden. The apex bank’s monetary policy direction focuses on stabilising the naira while balancing external obligations.
