Nigeria pays five times more for private external loans — W’Bank

In 2025, Nigeria paid five times more in interest rates for private external loans compared to official lenders, according to the World Bank Group. The interest rate charged by private creditors averaged 9.6 per cent, whereas official lenders charged 1.9 per cent. This significant cost disparity highlights the challenges Nigeria faces in accessing international financing for its $145.02bn external debt stock, which grew by 6.6 per cent in 2025, extending a decade-long increase.

The report indicated that private creditors offered loans with shorter maturities (12 years) and longer grace periods (eight years) than official creditors (25 years and five years), resulting in higher interest rates. The data showed that Nigeria's external debt comprised $62.40bn in public and publicly guaranteed debt, $54.48bn in private nonguaranteed debt, and $28.14bn in short-term debt.

The International Development Association was Nigeria's largest multilateral creditor, followed by the IMF and other bilateral lenders. Despite improvements in debt service ratios, the debt service burden remained significant, with the debt service-to-export ratio increasing by 9.6 per cent and debt service as a proportion of gross national income rising by 6.9 per cent.

The World Bank Group has been working to improve external debt transparency through creditor data-sharing exercises, validating information, and reconciling loan-level records with creditor records.