Nigeria faced borrowing costs five times higher from private creditors than from official lenders in 2025, according to the World Bank Group's International Debt Statistics. New loans from private creditors carried an average interest rate of 9.6 per cent, while official lenders charged 1.9 per cent. The disparity reflects a significant cost burden as Nigeria's total external debt stock climbed to $145.02bn, representing a 6.6 per cent increase from the previous year.
The gap in lending terms extends beyond interest rates. Official creditors offered loans with an average maturity of 25 years and a grace period of five years. Private creditors, by contrast, provided shorter-term financing with an average maturity of 12 years, though they offered a longer grace period of eight years. The World Bank noted that the actual repayment burden depends on the size, currency, maturity and terms of individual loans.
Nigeria's external debt profile is fragmented across multiple creditor types. Public and publicly guaranteed debt totalled $62.40bn, private nonguaranteed debt stood at $54.48bn, and short-term debt reached $28.14bn. Within public obligations, multilateral creditors held $31.37bn, bilateral lenders $6.68bn, and private creditors $24.35bn. The International Development Association, the World Bank's concessional lending arm, was the largest single creditor with $18.53bn, followed by IMF special drawing rights allocations of $5.52bn. China emerged as Nigeria's largest bilateral creditor with $5.67bn, followed by France with $774m.
The debt burden remains substantial relative to Nigeria's economic capacity. The debt service-to-export ratio stood at 19 per cent, up 9.6 per cent from the prior year, while debt service as a proportion of gross national income rose 6.9 per cent to five per cent. However, some metrics improved. The external debt-to-export ratio declined 4.3 per cent to 212 per cent, while external debt as a proportion of gross national income fell 6.6 per cent to 51 per cent. The World Bank noted that these contrasting movements show improvements in debt stock ratios did not translate into lower debt service ratios.
Nigeria's external debt has grown substantially over a decade. The World Bank's data showed the debt stock increased from $83.21bn in 2015 to $145.02bn in 2025, an addition of about $61.8bn. The World Bank Group's Chief Statistician, Haishan Fu, highlighted the importance of debt transparency through cooperation between borrowers and creditors. Since a data-sharing exercise began in 2022, successive rounds have helped reconcile loan-level records, identify discrepancies and validate information to improve the quality of external debt statistics.
For Nigeria's savers, borrowers and investors, the significantly higher cost of private external borrowing means the government faces steeper financing expenses that could affect domestic resource allocation and economic policy choices.