Fitch Ratings has projected that Nigeria’s external debt servicing obligations will rise to $5.2 billion in 2025, up from $4.7 billion in 2024. This increase includes $4.5 billion in amortisation payments and a $1.1 billion Eurobond repayment due in November 2025.
Despite this rise, Fitch considers the external debt service level as moderate. However, the agency highlighted concerns over Nigeria’s fiscal health, noting that interest payments are expected to consume over 30% of government revenue, with the federal government’s interest-to-revenue ratio nearing 50%. This situation underscores the country’s limited fiscal flexibility.
Fitch also observed that Nigeria’s gross external reserves increased to $41 billion at the end of 2024 but declined to $38 billion due to debt service payments.
The agency expects reserves to average five months of current external payments in the medium term, which is slightly above the median for countries with similar credit ratings.
In its latest assessment, Fitch upgraded Nigeria’s long-term foreign-currency issuer default rating from ‘B-‘ to ‘B’ with a stable outlook.
The upgrade reflects progress in macroeconomic policy reforms and improved external liquidity. However, Fitch cautioned that risks remain, particularly if oil prices fall or if the implementation of reforms slows down.
