Nigeria’s heavy reliance on Eurobond borrowing under President Bola Tinubu is raising alarm among economists and financial analysts, who warn the country could face mounting fiscal pressures if high-interest debt is not carefully managed. Data from the Debt Management Office (DMO) indicate that from Q3 2023 to Q2 2025, Nigeria spent approximately $2.93 billion on servicing Eurobond obligations, with $2.43 billion - or 83 per cent - going to interest payments and only $500 million toward principal reduction.
The figures reveal the costliness of commercial borrowing, with Eurobond payments consuming significant portions of Nigeria’s external debt service. Over the eight-quarter period, Eurobond obligations accounted for 31.5 per cent of the $9.32 billion total external debt service, underscoring the burden on government finances.
Q3 2023, the first full quarter of Tinubu’s administration, was the most expensive. Nigeria redeemed a $500 million maturing Eurobond, paying $943.66 million in total, with $443.66 million covering interest—67.8 per cent of the total external debt service that quarter. While Q4 2023 saw a dip due to no principal being due, the following quarters experienced repeated spikes, particularly in Q3 2024 and Q1 2025, when interest payments alone reached $427.72 million. Analysts highlight that these concentrated repayment cycles place recurring strain on federal finances.
Nigeria’s Eurobond stock has steadily grown, reaching $17.32 billion by June 2025, accounting for 36.86 per cent of total external debt, up from $15.62 billion in June 2023. The increase reflects refinancing of maturing bonds and new borrowing, including a $2.35 billion dual-tranche issuance in November 2025. Despite challenging global market conditions, the offering, with 10- and 20-year notes priced at 8.63 per cent and 9.13 per cent respectively, attracted $13 billion in investor demand—the largest orderbook Nigeria has ever recorded.
Government officials, including President Tinubu and Finance Minister Wale Edun, hailed the oversubscription as evidence of international confidence in Nigeria’s economy. DMO Director-General Patience Oniha said accessing long-term Eurobond financing aligns with the administration’s growth strategy while reducing dependence on short-term domestic borrowing.
However, experts caution that the short-term benefits carry long-term risks. Dayo Adenubi, a finance professional, warned that Eurobonds defer principal repayment until maturity, creating cycles of refinancing that could escalate debt stress if funded projects fail to deliver returns. “While easy to access, these loans are costly and market-driven,” he said, noting that serial refinancing could become unavoidable.
Other analysts, including Olatunde Amolegbe of Arthur Stevens Asset Management, acknowledged that Eurobonds offer speed and flexibility but stressed disciplined use and repayment capacity as essential to avoid fiscal strain. Lagos-based economist Adewale Abimbola also highlighted that commercial loans carry higher interest compared with multilateral borrowing and must be deployed for productive projects to remain sustainable.
The record-breaking November issuance underscores Nigeria’s access to global capital markets but also exposes the economy to foreign exchange and interest-rate risks. Without careful management, analysts warn that heavy Eurobond obligations could crowd out investment in critical infrastructure and social services, threatening long-term economic stability.
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