Foreign debt owed by Nigerian companies to overseas lenders climbed by 179.6 per cent in seven years, rising from $19.49 billion in 2018 to $54.48 billion in 2025, as private sector borrowing continues to account for a growing share of the country’s external debt.
The World Bank disclosed this in its International Debt Report 2026, which put Nigeria’s private sector nonguaranteed external debt at $54.476 billion as of December 2025.
The amount represents 37.6 per cent of Nigeria’s total external debt of $145.015 billion, which comprises government and publicly guaranteed loans, private sector foreign borrowing and short-term debt.
Public and publicly guaranteed external debt stood at $62.4 billion, while short-term external debt amounted to $28.139 billion.
The growth in private sector foreign debt outpaced the increase in government-backed external obligations, which rose by 155.5 per cent from $24.422 billion in 2018 to $62.4 billion in 2025.
The figures indicate that foreign loans owed by Nigerian companies are becoming an increasingly significant part of the country’s external debt exposure, although such obligations are not directly guaranteed by the government.
The World Bank defines private sector nonguaranteed debt as long-term external obligations owed by private borrowers without a public entity guaranteeing repayment.
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Its data also showed that private sector nonguaranteed debt, which represented about 79.8 per cent of public and publicly guaranteed external debt in 2018, increased to 87.3 per cent in 2025.
This suggests that foreign borrowing by Nigerian businesses is increasingly approaching the level of government-backed external obligations.
Meanwhile, Nigeria’s total external debt rose from $46.238 billion in 2018 to $145.015 billion in 2025, reflecting a substantial increase in the country’s exposure to foreign creditors.
The report also highlighted the higher cost of borrowing from private international lenders compared with official creditors.
According to the World Bank, new loans obtained by Nigeria from private creditors in 2025 attracted an average interest rate of 9.6 per cent, compared with 1.9 per cent for loans from official creditors, including foreign governments and multilateral development institutions.
Private creditors offered an average repayment period of 12 years, with an eight-year grace period, while official creditors provided an average repayment period of 25 years and a five-year grace period.
Further debt indicators showed that Nigeria’s external debt stood at 212 per cent of exports and 51 per cent of Gross National Income (GNI) in 2025.
Debt service accounted for 19 per cent of exports and five per cent of GNI during the period.
Although private sector non-guaranteed debt is not a direct government liability, the rising foreign currency obligations expose Nigerian companies to exchange rate fluctuations and refinancing risks, particularly businesses that earn most of their revenue in naira.
