Nigeria's external debt service drops to $954m in Q1 2026, DMO data shows

Nigeria spent $954.06 million servicing its external debt in the first quarter of 2026, a 31.5% decline from the $1.39 billion recorded in the same period of 2025. The latest Debt Management Office data shows the drop was driven mainly by a fall in principal repayments.

The Q1 2026 payment comprised $308.33 million in principal, $623.22 million in interest and $22.50 million in other charges. In Q1 2025, principal repayment stood at $759.58 million, more than double the latest figure. Other charges rose sharply from $3.18 million to $22.50 million over the same period.

Interest costs still dominate

Interest remained the largest component of external debt service in Q1 2026. Commercial creditors took the biggest share at $501.84 million, followed by multilateral creditors at $271.90 million and bilateral creditors at $180.32 million.

Commercial payments were dominated by interest obligations of $476.86 million. The Eurobond alone accounted for $427.72 million of that interest. First Abu Dhabi Bank received $47.72 million in interest and $20.56 million in other charges, bringing total payments to the bank to $68.28 million during the quarter.

Creditor breakdown

Multilateral creditors received $271.90 million in Q1 2026, made up of $176.34 million in principal, $95.53 million in interest and $30,107.78 in other charges. The International Development Association accounted for $243.42 million of the total, including $156.94 million in principal and $86.47 million in interest.

Bilateral creditors got $180.32 million, with the Export-Import Bank of China responsible for $174.84 million of that amount.

The Q1 2026 figure also fell 47.0% from the $1.80 billion spent on external debt service in Q4 2025. The drop largely reflects the absence of the $1.12 billion Eurobond principal repayment recorded in the previous quarter.

Total public debt picture

Nigeria's total debt service has risen sharply in recent years. It jumped to N16.26 trillion in 2025 from N7.79 trillion in 2023. Since Q3 2023, when President Bola Ahmed Tinubu's administration took office, quarterly debt service has stayed elevated, peaking at a record N4.86 trillion in Q4 2025.

That peak was 37.86% higher than the N3.52 trillion recorded in Q3 2025 and 49.93% above the N3.24 trillion in Q4 2024. Total public debt stood at N159.35 trillion as of March 31, 2026, up marginally from N159.28 trillion at the end of December 2025.

The Nigerian Economic Summit Group has warned that Nigeria remains exposed to significant debt risks despite improving fiscal indicators. It cited weak revenue generation, persistent structural imbalances, and continued borrowing to finance budget deficits and sustain public spending. The debt portfolio remained broadly stable, with a slight shift toward domestic borrowing over the past year.

What this means for the naira

The lower external debt service bill eases pressure on Nigeria's dollar reserves and reduces demand for foreign exchange in the quarter. But total debt service remains heavy because of rising domestic interest payments, which continue to strain government finances.