Nigerian companies owed foreign lenders $54.48 billion at the end of 2025, nearly three times the $19.49 billion they owed in 2018, according to the World Bank's International Debt Report 2026. This 179.6 per cent increase over the seven-year period far exceeded the growth in government-backed external debt, which rose 155.5 per cent from $24.422 billion in 2018 to $62.4 billion in 2025.
The World Bank defines private sector nonguaranteed external debt as money borrowed by private companies from foreign banks, investors and other lenders without government or public institution backing. This type of borrowing has become an increasingly significant part of Nigeria's overall external obligations. In 2018, private sector nonguaranteed debt represented about 79.8 per cent of public and publicly guaranteed external debt. By 2025, that proportion had grown to 87.3 per cent, showing the rising weight of private company borrowing in Nigeria's total external debt burden.
Nigeria's total external debt, encompassing government borrowing, private company foreign loans and short-term obligations, climbed from $46.238 billion in 2018 to $145.015 billion in 2025. The World Bank report highlighted stark differences in borrowing costs between private and official lenders. New loans obtained by Nigerian companies from private foreign creditors in 2025 carried an average interest rate of 9.6 per cent, more than five times the 1.9 per cent rate for loans from official creditors such as governments and multilateral institutions. Private lenders also offered shorter repayment periods, averaging 12 years compared with 25 years for official creditors.
For Nigerian savers, borrowers and businesses, the rising private sector foreign debt means higher borrowing costs and tighter repayment schedules for companies, which could affect investment and job creation.