Nigeria is gearing up to confront two major debt obligations before 2025 ends: a $1.12 billion Eurobond and a ₦100 billion Sukuk redemption. These maturities have become central tests of the country’s ability to manage mounting fiscal pressure and sustain investor confidence.
The Eurobond, carrying a 7.625% coupon, was issued in November 2018 and is set to mature on 21 November 2025. It played a key role in Nigeria’s external borrowing strategy, aimed at funding infrastructure and supporting foreign reserves. Despite global financial uncertainties at the time, investor appetite was strong when it was issued.
Meanwhile, the Sukuk bond, which was issued via FGN Roads Sukuk Company 1 Plc, carries a 15.743% rate and is due on 28 December 2025. This instrument was floated primarily to fund national road projects and to deepen Islamic finance in Nigeria’s debt mix. At ₦100 billion, it translates to roughly $68.5 million, using the exchange rate of ₦1,465 per dollar.
When you convert both obligations into local currency, they total over ₦1.7 trillion, a heavy burden amid already strained public finances. Meanwhile, data from Nigeria’s Debt Management Office (DMO) reveals that debt servicing alone exceeded ₦5 trillion in the first half of 2025. Analysts now question if the government will refinance, issue new debt, or restructure existing obligations to weather this wave of redemptions.
On the external front, Nigeria’s bond payouts are already consuming a large slice of its fiscal space. In just the first half of 2025, the country spent $2.32 billion (about ₦3.4 trillion) on servicing external debt. Of this, IMF and Eurobond payments made up nearly 65%, with the IMF alone receiving $816.3 million (35.2% of the total) and Eurobond holders $687.8 million (29.6%). Other creditors like the World Bank, AfDB, and China-based lenders accounted for the remainder. Notably, repayments to China’s EXIM and Development Bank dropped in share, suggesting shifts in Nigeria’s borrowing patterns.
On the domestic side, local debt obligations are similarly capping the government’s flexibility. Between April and June 2025, ₦1.7 trillion was spent servicing local debt, split between FGN bonds, Treasury Bills, and other instruments. By combining domestic and external spending, Nigeria’s debt service hit ₦5.7 trillion in the first half of 2025, almost half of projected revenues.
Analysts are outspoken about the urgency of rethinking Nigeria’s debt approach. Akin Olaniyan, CEO of Chatterhouse Limited, warned that Nigeria has “little room to manoeuvre” as interest payments already swallow a large share of national income. He urged more revenue diversification, tighter borrowing discipline, and strategic use of debt tied to productive assets. He also suggested debt restructuring and minimizing use of foreign reserves for servicing as temporary measures.
Investment banker Tajudeen Olayinka echoed the concerns, noting that while local-currency debt is manageable, foreign obligations are riskier unless exports improve. He observed that Nigeria’s foreign reserves have seen some gains, largely from past Eurobond and diaspora bond inflows, offering a temporary cushion. Olayinka added that weak monetary policy transmission is compounding the problem: “interest rates and inflation should by now be approaching single digits,” he said, noting central bank moves to influence the fixed-income market.
In sum, Nigeria’s upcoming maturities in late 2025 underscore the urgent need for a debt strategy rooted in sustainability, fiscal transparency, stronger revenue streams, and private capital mobilization. Without those, growing vulnerabilities may deepen despite efforts to stabilize debt service capacity.
