Nigeria paid significantly higher interest rates on new external loans from private creditors than from official lenders in 2025, with borrowing costs averaging 9.6 per cent compared with 1.9 per cent, according to the World Bank Group.

This means that interest rates charged by private creditors were five times higher than those offered by official lenders, spotlighting the cost disparity in Nigeria’s access to international financing as its total external debt stock rose to $145.02bn.

The World Bank’s latest International Debt Statistics showed that Nigeria’s external debt increased by 6.6 per cent in 2025 from the previous year, extending a decade-long rise from $83.21bn in 2015. The latest figure represents an increase of about $61.8bn over the 10-year period.

“The new loans from official creditors had an average maturity of 25 years, a grace period of five years and an interest rate of 1.9 per cent. In comparison, private creditors offered an average maturity of 12 years, a grace period of eight years and an interest rate of 9.6 per cent,” the data showed.

The higher interest rates on private borrowing indicate a substantially greater financing cost for borrowers accessing commercial international capital, although the actual repayment burden depends on the size, currency, maturity and terms of individual loans.

According to the report, Nigeria’s external debt profile comprised $62.40bn in public and publicly guaranteed debt, $54.48bn in private nonguaranteed debt and $28.14bn in short-term debt.

Within public and publicly guaranteed obligations, multilateral creditors accounted for $31.37bn, while bilateral lenders held $6.68bn. Private creditors accounted for the remaining $24.35bn.

The World Bank data showed that the International Development Association, the World Bank’s concessional lending arm, was Nigeria’s largest multilateral creditor, with $18.53bn. IMF special drawing rights allocations accounted for $5.52bn, while other multilateral institutions held $7.32bn.

China was Nigeria’s largest bilateral creditor, with $5.67bn, followed by France with $774m and other bilateral lenders with $237m.

The figures also showed that Nigeria’s external debt service burden remained significant relative to its foreign exchange earnings. Its debt service-to-export ratio stood at 19 per cent, representing a 9.6 per cent increase, while debt service as a proportion of gross national income rose by 6.9 per cent to five per cent.

However, the country’s external debt-to-export ratio declined by 4.3 per cent to 212 per cent, while external debt as a proportion of gross national income fell by 6.6 per cent to 51 per cent.

The contrasting movements in the indicators show that improvements in debt stock ratios relative to exports and national income did not translate into lower debt service ratios over the period measured.

Nigeria’s total external debt stock stood at $145.02bn in 2025, against a gross national income of $281.70bn and a population of 237.5 million, according to the World Bank classification.

The Chief Statistician of the World Bank Group, Haishan Fu, said that for more than five decades, the World Bank Group has worked with borrowing countries to build the most comprehensive source of comparable external debt data for developing economies. But transparency cannot rest on debtor reporting alone.

“A major advance in recent years has been the systematic reconciliation of loan-by-loan information reported by borrowers through the World Bank Group’s Debtor Reporting System with corresponding records provided by bilateral creditors. The results show what cooperation between borrowers and creditors can achieve.

“Since the creditor data-sharing exercise began in 2022, successive rounds have helped reconcile loan-level records, identify discrepancies, validate information, and close critical data gaps, strengthening the quality and consistency of external debt statistics. This is debt transparency in practice. It is not simply about publishing more data. It is about comparing borrowers’ and creditors’ records, identifying inconsistencies, resolving differences, and progressively improving the common information base on which debt decisions are made,” he added.