Nigeria’s total public debt climbed to ₦166.79 trillion at the end of June 2026, representing a ₦7.44 trillion increase from the previous quarter, even as the country’s external debt servicing bill declined during the period.
Figures from the Debt Management Office (DMO) showed that Nigeria’s debt stock increased from ₦159.35 trillion recorded at the end of March to ₦166.79 trillion by June 30.
The latest figure, equivalent to about $120.93 billion, comprises ₦91.59 trillion in domestic debt and approximately ₦75.19 trillion in external obligations.
Domestic debt accounted for about 54.91 per cent of the total portfolio.
However, the rise in the naira value of the debt stock does not necessarily mean Nigeria borrowed an additional ₦7.44 trillion during the quarter.
The DMO valued the country’s external obligations using the Central Bank of Nigeria’s official exchange rate of ₦1,379.1842 to the dollar as of June 30. Changes in the exchange rate can therefore affect the naira value of dollar-denominated debt, meaning the quarterly increase should not automatically be interpreted as fresh borrowing.
External debt payments fall
While the overall debt stock increased, Nigeria spent less servicing its external obligations in the second quarter.
External debt service fell from $954.06 million in the first quarter to $870.73 million between April and June, representing a reduction of $83.33 million, or about 8.7 per cent.
But a closer look at the figures shows that a substantial portion of the money went towards servicing interest rather than reducing the principal debt.
Of the $870.73 million paid during the quarter, $491.73 million, or 56.5 per cent, went to interest payments.
Principal repayments accounted for $339.75 million, while other charges amounted to $39.25 million.
Although interest payments declined from $623.22 million in the previous quarter, they remained significantly higher than principal repayments.
The figures highlight the pressure debt servicing continues to place on government finances, particularly as a large share of external payments goes towards the cost of existing borrowing.
Who received the money?
Multilateral institutions received the largest portion of Nigeria’s external debt service payments during the quarter, collecting $404.22 million.
The International Development Association received $204.86 million, while the African Development Bank received $127.24 million. The International Bank for Reconstruction and Development received another $44.42 million.
Commercial creditors received $325.70 million, with no principal repayment recorded under that category.
Of the payments to commercial creditors, $292.85 million represented interest, while $32.85 million went to other charges.
Eurobond interest alone accounted for $217.44 million.
Nigeria also made payments connected to financing arrangements involving Afrexim Bank and First Abu Dhabi Bank, while charges associated with a First Abu Dhabi Bank total return swap stood at $22.50 million.
Bilateral creditors received $140.81 million, including $101.48 million in principal repayments.
Exim Bank of China received the largest bilateral payment at $70.94 million, followed by Agence Française de Développement, which received $45.39 million.
Federal Government carries bulk of debt
The Federal Government remained by far the largest borrower in the country’s debt portfolio.
It accounted for about ₦87 trillion in domestic debt and ₦65.77 trillion in external obligations.
States and the Federal Capital Territory jointly owed ₦4.59 trillion domestically and another ₦9.42 trillion externally.
Within the Federal Government’s domestic debt portfolio, FGN bonds remained the biggest component, standing at ₦64.84 trillion.
That figure included ₦41.47 trillion in naira-denominated bonds, ₦22.11 trillion in securitised Ways and Means advances and a domestic dollar bond valued at ₦1.27 trillion.
Nigerian Treasury Bills accounted for an additional ₦19.48 trillion.
The latest figures underline the growing size and complexity of Nigeria’s debt obligations, with the total stock now almost twice the ₦87.38 trillion recorded at the end of June 2023.
Beyond the headline debt figure, the second-quarter data also draw attention to the cost of servicing those obligations.
Despite the decline in external debt service during the quarter, more than half of the amount paid went towards interest, meaning a significant portion of Nigeria’s external debt payments did not directly reduce the principal owed.
The figures therefore put renewed focus on not only how much Nigeria owes, but also the structure, cost and sustainability of the country’s growing debt portfolio.
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