By Chibuzor Alli
China accounts for nearly 85 per cent of Nigeria’s loans from foreign governments, with the country’s bilateral debt to Beijing reaching $5.67bn at the end of 2025, according to the World Bank.
The figure makes China Nigeria’s biggest bilateral creditor by a significant margin, highlighting the Asian country’s dominant position among governments that have extended loans to Africa’s most populous nation.
Data contained in the World Bank’s International Debt Report 2026, uploaded to its website on Friday, showed that Nigeria owed foreign governments a combined $6.68bn as of December 2025.
France ranked a distant second with $774m in outstanding loans, while other bilateral creditors accounted for the remaining $237m.
The figures mean that for every dollar Nigeria owes foreign governments, approximately 85 cents is owed to China.
Bilateral debt refers to loans provided directly by one government to another, either through government institutions or government-backed agencies. This category is distinct from multilateral borrowing obtained from international financial institutions such as the World Bank.
However, Nigeria’s exposure to foreign creditors extends far beyond government-to-government loans.
The World Bank report showed that the country’s total external debt stock climbed to $145.02bn in 2025, representing a 6.6 per cent increase from $136.05bn recorded in 2024.
Over the past decade, Nigeria’s external debt has expanded by approximately 74.3 per cent, rising from $83.21bn in 2015 to $145.02bn in 2025.
World Bank, IMF account for major share of Nigeria’s debt
Of Nigeria’s $145.02bn external debt stock, public and publicly guaranteed obligations accounted for $62.4bn.
These include direct government borrowing as well as loans obtained by other entities backed by government guarantees.
Multilateral creditors held the largest portion of this category, with outstanding obligations of $31.37bn, followed by private creditors with $24.35bn and bilateral lenders with $6.68bn.
Within the multilateral category, the World Bank’s International Development Association accounted for $18.53bn.
The International Monetary Fund’s Special Drawing Rights allocations represented another $5.52bn, while other multilateral institutions accounted for $7.32bn.
Beyond government-backed obligations, Nigeria also had $54.48bn in private nonguaranteed external debt and $28.14bn in short-term external debt.
Private nonguaranteed debt represents foreign loans taken by private-sector entities without government guarantees, while short-term external debt generally covers obligations with an original maturity of one year or less.
Tinubu seeks additional $7.7bn foreign loans
The latest debt figures emerge as President Bola Tinubu’s administration seeks legislative approval to raise another $7.707bn from international financing sources to help fund the 2026 budget.
In a letter read by Senate President Godswill Akpabio during plenary on Wednesday, the President requested approval for the proposed external borrowing, valued at approximately N10.79tn using the budget exchange rate of N1,400 to the dollar.
The proposed foreign financing represents the external component of the N29.2tn new borrowing provision in the 2026 Appropriation Act.
The borrowing plan comprises N18.4tn in domestic financing and N10.79tn in external loans.
If approved and fully raised, the additional borrowing would increase Nigeria’s exposure to international creditors at a time when its existing external debt stock is already on an upward trajectory.
Debt repayments put pressure on Nigeria’s earnings
The World Bank also highlighted indicators of Nigeria’s capacity to service its external obligations, including the relationship between debt repayments, export earnings and national income.
According to the report, Nigeria’s external debt-to-exports ratio stood at 212 per cent in 2025, while external debt-to-Gross National Income reached 51 per cent.
The country’s debt service-to-exports ratio was 19 per cent, indicating that external debt repayments were equivalent to nearly one-fifth of export earnings.
Meanwhile, debt service-to-GNI stood at five per cent.
The cost of new external borrowing also varied considerably depending on the source of financing.
Nigeria’s average interest rate on new external loan commitments from official creditors was 1.9 per cent, compared with 9.6 per cent for loans from private creditors.
Commenting on the broader debt situation facing developing economies, World Bank Group Chief Statistician and Director of Development Data, Haishan Fu, warned that increased borrowing costs could undermine long-term development.
“The return of private lending to low- and middle-income countries is welcome, but these countries are borrowing more, paying more, and in many cases leaving less for long-term development,” Fu stated.
“Managing debt responsibly means giving everyone, including future generations, a chance to thrive.”
The report underscores the growing scale of Nigeria’s external financial obligations, the concentration of its bilateral borrowing among a few creditors and the importance of managing the cost of new loans.
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