Nigeria spends nearly $1bn on foreign debt servicing in first two months of 2026

Nigeria spent almost $1bn servicing its foreign loans in the first two months of 2026, as external debt repayments climbed amid rising capital outflows from the economy. The figure, obtained from the Central Bank of Nigeria’s February 2026 Economic Report, showed that the country paid $440m in January and $480m in February, bringing the total foreign debt servicing bill to $920m.

Capital outflows surge in February

The CBN report revealed that total capital outflows rose sharply in February, driven largely by higher capital transfers and increased loan repayments. According to the CBN, “Capital outflows increased, mainly on account of higher capital transfers in the review period. Total capital outflow rose to $2.75bn, from $1.63bn in the preceding month.”

The apex bank attributed the increase primarily to a sharp rise in capital transfers, although debt repayments also contributed. It stated, “The development was driven mainly by a 91.53 per cent increase in capital transfers to $2.26bn, relative to the level in the preceding month. Outflow through loan repayments also rose to $0.48bn from $0.44bn in January 2026.”

Debt service costs mount

The $920m spent on foreign debt servicing in just two months underscores the growing burden of Nigeria’s external obligations. January’s $440m and February’s $480m payments reflect a steady increase in repayments, even as the government continues to borrow to fund budget deficits. The CBN data did not specify which loans were repaid, but the figures cover both principal and interest payments on bilateral, multilateral, and commercial debts.

Nigeria’s total external debt stock stood at over $42bn as of the end of 2025, according to the Debt Management Office. Servicing these loans consumes a significant portion of the country’s foreign exchange earnings, leaving less room for other critical imports and investments.

What this means for the naira and Nigerian businesses

The sustained capital outflows, driven by debt repayments and capital transfers, put additional pressure on Nigeria’s foreign reserves and the naira. With nearly $1bn leaving the economy in two months for debt service alone, the CBN faces a tougher battle to defend the currency. For Nigerian businesses, this means continued forex scarcity and higher costs for imported raw materials and equipment, which could feed into consumer prices in the months ahead.