Nigeria has spent about $2.93bn servicing Eurobond debt in eight quarters under President Bola Tinubu, with interest payments consuming an overwhelming 83 per cent of the total, an analysis of external debt-service data from the Debt Management Office has shown.
The figures, covering Q3 2023 to Q2 2025, reveal that Eurobond obligations accounted for 31.5 per cent of Nigeria’s total external-debt servicing of $9.32bn within the two-year period. Of the $2.93bn paid, only $500m went toward redeeming principal, underscoring the high cost of Nigeria’s reliance on commercial borrowing.
Costliest Quarter Under Tinubu
Tinubu’s first full quarter in office, Q3 2023, was the most expensive period in the review window. Nigeria paid $943.66m on Eurobonds including a $500m principal redemption representing 67.8 per cent of the total external-debt servicing of $1.39bn that quarter.
Eurobond costs dropped sharply in Q4 2023 due to the absence of principal payments, with the government servicing only $148.57m in interest. However, commercial-debt costs climbed again from Q1 2024 and peaked at $427.72m in both Q3 2024 and Q1 2025, driven entirely by coupon obligations.
In Q2 2025, Eurobond servicing fell to $260.07m but still accounted for 27.9 per cent of total external-debt servicing.
Rising Exposure to Commercial Debt
Further analysis showed that Nigeria’s Eurobond stock increased from $15.62bn in June 2023 to $17.32bn by June 2025 a rise of $1.70bn, or 10.88 per cent. Eurobonds now represent 36.86 per cent of the country’s total external debt.
The Federal Executive Council and National Assembly have approved fresh Eurobond issuance worth $2.3bn for the 2024–2025 borrowing plan, alongside $1.1bn earmarked for refinancing maturing obligations.
In November, Nigeria raised $2.35bn from international investors in a dual-tranche issuance $1.25bn due in 2036 at 8.63 per cent, and $1.10bn due in 2046 at 9.13 per cent attracting a record $13bn in bids. The notes will be listed on the London Stock Exchange, FMDQ Securities Exchange, and the Nigerian Exchange.
President Tinubu described the oversubscription as evidence of investor confidence in Nigeria’s reforms, while Finance Minister Wale Edun said the strong demand highlighted renewed trust in the country’s fiscal strategy.
Analysts Warn of Growing Interest Burden
Financial experts, however, offered mixed reactions. Some warned that while Eurobonds provide quick access to capital and avoid the stringent conditions typical of multilateral loans, they deepen Nigeria’s exposure to costly interest obligations and refinancing risks.
Arthur Stevens Asset Management CEO, Olatunde Amolegbe, noted that Eurobonds remain attractive for their speed and flexibility but stressed disciplined deployment and repayment capacity.
A Lagos-based economist, Adewale Abimbola, downplayed concerns, arguing that Nigeria’s repayment track record and recent oversubscription reflected strong investor confidence. He added that currency stability could significantly reduce exchange-rate risks.
But finance analyst Dayo Adenubi cautioned that Eurobonds, though easier to secure, are inherently expensive and often encourage serial refinancing, warning that Nigeria must avoid the debt traps that have affected Ghana, Sri Lanka, and Kenya.
He said Eurobond-funded projects must deliver strong economic returns to prevent future distress: “If the projects do not turn out as successful as forecasted, there’s risk of default, which can get very ugly.”
