NIGERIA OWES CHINA $5.67BN, WORLD BANK REPORT REVEALS

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By: Hammad Fasasi

Nigeria owed China $5.67bn in bilateral external debt as of the end of 2025, representing approximately 85 per cent of its total $6.68bn debt to foreign governments, according to the World Bank.

The figure makes China Nigeria’s largest bilateral creditor, ahead of France, which was owed $774m, while other bilateral lenders accounted for the remaining $237m.

The World Bank disclosed this in its International Debt Report 2026, published on its website on Friday. The report also revealed that Nigeria’s total external debt rose by 6.6 per cent, from $136.05bn in 2024 to $145.02bn in 2025.

Bilateral loans are funds provided by one government to another, either directly or through government-backed agencies. They differ from multilateral loans, which are obtained from institutions such as the World Bank and other international development organisations.

Nigeria’s bilateral debt of $6.68bn forms part of its $62.4bn public and publicly guaranteed external debt, which covers direct government borrowings and loans secured by other entities with government guarantees.

According to the 280-page report, multilateral creditors accounted for the largest portion of the public and publicly guaranteed external debt at $31.37bn, while private creditors held $24.35bn.

Within the multilateral category, the World Bank’s International Development Association accounted for $18.53bn, while the International Monetary Fund’s Special Drawing Rights allocations stood at $5.52bn. Other multilateral institutions accounted for $7.32bn.

The report further showed that Nigeria’s total external debt increased from $83.21bn in 2015 to $145.02bn in 2025, representing a rise of approximately 74.3 per cent over the decade.

The country’s external debt comprised $62.4bn in public and publicly guaranteed obligations, $54.48bn in private nonguaranteed debt and $28.14bn in short-term external debt.

Private nonguaranteed debt refers to foreign loans obtained by private-sector organisations without government guarantees, while short-term external debt generally covers obligations with an original maturity of one year or less.

The increase in external debt comes as President Bola Tinubu seeks approval from the National Assembly to secure an additional $7.7bn through international financing sources to partly fund the 2026 budget deficit.

In a letter read by Senate President Godswill Akpabio during plenary on Wednesday, Tinubu requested approval to borrow $7.707bn, equivalent to approximately N10.79tn at the budget exchange rate of N1,400 to the dollar.

The proposed borrowing represents the external financing component of the N29.2tn new borrowing provision in the 2026 Appropriation Act. The provision comprises N18.4tn in domestic borrowing and N10.79tn in external financing.

On debt sustainability, the World Bank reported that Nigeria’s external debt-to-exports ratio stood at 212 per cent in 2025, while its external debt-to-Gross National Income ratio was 51 per cent.

The debt service-to-exports ratio also increased to 19 per cent, while debt service-to-GNI stood at five per cent, indicating the share of export earnings and national income required to meet external debt repayment obligations.

The report further revealed that 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 private creditors.

Commenting on the findings, World Bank Group Chief Statistician and Director of Development Data, Haishan Fu, said the return of private lending to low- and middle-income countries was welcome but warned that many were borrowing more and paying higher interest rates, leaving fewer resources for long-term development.

“Managing debt responsibly means giving everyone, including future generations, a chance to thrive,” Fu said.