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

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Nigeria paid 9.6% interest on new private external loans in 2025, five times more than the 1.9% from official lenders, a new World Bank report reveals. Read More:…

Nigeria paid significantly higher interest rates on new external loans from private creditors than from official lenders in 2025, with borrowing costs averaging 9.6 per cent compared with 1.9 per cent, according to the World Bank Group.

This means that interest rates charged by private creditors were five times higher than those offered by official lenders, spotlighting the cost disparity in Nigeria’s access to international financing as its total external debt stock rose to $145.02bn.

The World Bank’s latest International Debt Statistics showed that Nigeria’s external debt increased by 6.6 per cent in 2025 from the previous year, extending a decade-long rise from $83.21bn in 2015. The latest figure represents an increase of about $61.8bn over the 10-year period.

“The new loans from official creditors had an average maturity of 25 years, a grace period of five years and an interest rate of 1.9 per cent. In comparison, private creditors offered an average maturity of 12 years, a grace period of eight years and an interest rate of 9.6 per cent,” the data showed.

The higher interest rates on private borrowing indicate a substantially greater financing cost for borrowers accessing commercial international capital, although the actual repayment burden depends on the size, currency, maturity and terms of individual loans.

According to the report, Nigeria’s external debt profile comprised $62.40bn in public and publicly guaranteed debt, $54.48bn in private nonguaranteed debt and $28.14bn in short-term debt.

Within public and publicly guaranteed obligations, multilateral creditors accounted for $31.37bn, while bilateral lenders held $6.68bn. Private creditors accounted for the remaining $24.35bn.

The World Bank data showed that the International Development Association, the World Bank’s concessional lending arm, was Nigeria’s largest multilateral creditor, with $18.53bn.

China was Nigeria’s largest bilateral creditor, with $5.67bn, followed by France with $774m and other bilateral…

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