Foreign debt owed by Nigerian companies to overseas lenders rose by 179.6 per cent in seven years to $54.48 billion in 2025 from $19.49 billion in 2018, as private sector borrowing continues to account for a growing share of the country’s external debt.
The World Bank in its “International Debt Report 2026” put Nigeria’s private sector nonguaranteed external debt at $54.476 billion as of December 2025, representing 37.6 per cent of Nigeria’s total external debt of $145.015 billion in 2025, which comprises government and publicly guaranteed borrowing, private sector foreign loans and short-term debt.
Of the total external debt stock, public and publicly guaranteed debt accounted for $62.4 billion, while short-term external debt stood at $28.139 billion. The growth in private sector foreign debt was faster than 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 private companies’ external borrowing is becoming an increasingly significant component of Nigeria’s debt exposure, although such obligations are not directly guaranteed by the government.
The World Bank defines private sector nonguaranteed external debt as long-term external obligations of private borrowers that are not guaranteed by a public entity. According to the report, “Private nonguaranteed debt comprises long-term external obligations of private debtors that are not guaranteed by a public entity.”
It explained that public and publicly guaranteed external debt covers long-term obligations of public debtors, including the central government and state-owned enterprises, while short-term debt refers to obligations with an original maturity of one year or less.
A comparison of the figures 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 the volume of foreign loans owed by Nigerian companies is increasingly approaching the level of government-backed external obligations.
Meanwhile, Nigeria’s total external debt increased from $46.238 billion in 2018 to $145.015 billion in 2025, representing a substantial rise in the country’s exposure to foreign creditors.
Beyond the increase in borrowing, the World Bank report highlighted the relatively higher cost of accessing financing from private international lenders compared with official creditors.
It stated that 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.
The report also showed that private creditors offered an average repayment period of 12 years, with an eight-year grace period, compared with 25 years and a five-year grace period for official creditors.
The World Bank’s debt indicators further showed that Nigeria’s external debt stood at 212 per cent of exports and 51 per cent of Gross National Income (GNI) in 2025, while debt service accounted for 19 per cent of exports and five per cent of GNI.
Although private sector nonguaranteed debt does not constitute a direct liability of the government, increased foreign currency borrowing exposes companies to exchange rate movements and refinancing risks, particularly where their revenues are largely generated in naira.