Nigeria expended about $920 million on servicing its foreign debt obligations in the first two months of 2026, reflecting the growing cost of managing the country’s external liabilities despite improvements in key macroeconomic indicators.
Data contained in the Central Bank of Nigeria’s February 2026 Economic Report showed that debt service payments rose from $440 million in January to $480 million in February, bringing the cumulative figure for the two-month period to $920 million.
The latest figures emerged as total capital outflows from the economy increased significantly in February, driven by a surge in capital transfers and higher loan repayments.
According to the report, total capital outflows rose to $2.75 billion in February, compared with $1.63 billion recorded in January.
The apex bank attributed the increase largely to a sharp rise in capital transfers, which climbed to $2.26 billion during the month.
“Capital outflows increased, mainly on account of higher capital transfers in the review period. Total capital outflow rose to $2.75 billion, from $1.63 billion in the preceding month,” the CBN stated.
It noted that capital transfers expanded by 91.53 per cent relative to the previous month, while loan repayment obligations also increased.
“The development was driven mainly by a 91.53 per cent increase in capital transfers to $2.26 billion, relative to the level in the preceding month. Outflow through loan repayments also rose to $0.48 billion from $0.44 billion in January 2026,” the report added.
The CBN said capital transfers accounted for 82.18 per cent of total outflows in February, while loan repayments represented 17.45 per cent. Dividend repatriation made up the remaining share.
The figures underscore the significant burden posed by debt servicing, with foreign loan repayments accounting for a sizeable portion of the country’s capital outflows during the period.
Sectoral analysis showed that the banking industry recorded the highest capital outflows, accounting for 45.96 per cent of the total. The financing sector followed with 26.10 per cent, while the oil and gas industry contributed 15.72 per cent.
The telecommunications sector accounted for 3.51 per cent of outflows, while production and manufacturing activities represented 2.62 per cent. Other sectors made up the balance.
By location, Lagos remained the dominant source of capital outflows, contributing 62.90 per cent of the total, while the Federal Capital Territory accounted for 37.04 per cent. The remaining outflows originated from other states.
Despite the rise in capital movements out of the country, the CBN maintained that Nigeria’s external sector remained resilient.
The bank said the country recorded stronger trade performance and higher capital inflows during the period, supported by lower import costs and increased capital transfers.
“Despite heightened geopolitical risks and trade tensions, the external sector recorded a higher trade surplus and capital inflows, due largely to lower import bills and increased capital transfers,” the report noted.
The report also showed that Nigeria’s external reserves increased to $50.12 billion in February from $48.88 billion in January, enough to provide import cover for 9.61 months, significantly above internationally recommended levels.
The latest debt servicing figures add to concerns about the trajectory of Nigeria’s external debt profile.
Central Bank data previously indicated that the country spent $5.21 billion on external debt servicing in 2025, representing more than 72 per cent of all international payments made during the year. The amount was higher than the $4.66 billion recorded in 2024.
Meanwhile, the International Monetary Fund has projected a further rise in Nigeria’s public external debt over the next two years.
In its 2026 Article IV Consultation Report, the Fund forecast that public external debt would increase from $51.9 billion in 2025 to $66.5 billion in 2026 and rise further to $72.6 billion in 2027.
The projection represents an increase of about $20.7 billion over the period and points to mounting debt obligations despite ongoing economic reforms.
The IMF also projected that public external debt service would account for 8.8 per cent of exports of goods and services by 2027, while interest payments on public debt are expected to rise from $2 billion in 2025 to $3 billion within the same period.
The Fund further estimated that debt servicing would continue to consume a substantial portion of Federal Government revenue, with interest payments projected to remain above 50 per cent of government earnings through 2027.
Amid growing debate over the country's borrowing profile, Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, has defended government borrowing, arguing that debt should be assessed based on its purpose, cost and expected economic returns.
According to him, borrowing to fund productive investments that generate returns exceeding the cost of financing should be regarded as a strategic economic decision rather than a sign of fiscal irresponsibility.
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