The World Bank has expressed considerations as external debt owed by developing international locations rose 5.5% to a record $9.4 trillion in 2025, pushed by elevated borrowing from personal collectors and renewed entry to worldwide bond markets pushed up debt ranges.
The Bank disclosed this in its International Debt Report 2026, launched on Thursday, November 5, warning that greater borrowing prices and mounting debt-service obligations may depart governments with fewer sources for important improvement investments.
According to the Bank, the rise was the quickest since 2021 and roughly 4 occasions the common progress recorded between 2022 and 2024, highlighting the rising financing pressures dealing with developing economies regardless of improved entry to worldwide capital.
Debt grew even quicker among the many most weak economies, with external debt in international locations eligible for concessional financing from the World Bank’s International Development Association (IDA) rising 8.1% to $1.3 trillion.
Private collectors drive enhance in external debt
Private collectors accounted for a lot of the rise in developing international locations’ external debt as worldwide monetary markets reopened to a number of rising and developing economies.
- “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,” mentioned Haishan Fu, World Bank Group Chief Statistician and Director of Development Data.
Bond issuance by public entities rose almost 35% to $251 billion in 2025, its highest degree in 5 years.
However, the World Bank famous that some governments used proceeds from new bond issuances to purchase again maturing debt, serving to to unfold compensation obligations over longer durations with out considerably decreasing total debt shares.
- These refinancing transactions usually got here at greater rates of interest, growing the price of servicing the debt.
Early 2026 knowledge additionally point out that demand for worldwide bond financing has remained sturdy regardless of elevated borrowing prices. By mid-August, greater than 10 developing international locations had already exceeded their full-year 2025 bond issuance, whereas a number of others returned to worldwide markets.
Nigeria’s external debt rises to $54.52 billion
Nigeria’s borrowing profile displays a few of the pressures highlighted within the World Bank report, with external debt growing alongside home obligations as the Federal Government continues to depend on multilateral lenders, worldwide capital markets and home securities to finance its spending.
- Data from the Debt Management Office (DMO) present that Nigeria’s external debt stock increased to $54.52 billion as of June 30, 2026, from $51.90 billion in March 2026, representing a rise of $2.62 billion in three months.
- The nation’s whole external debt additionally elevated from roughly $43.1 billion when President Bola Tinubu assumed workplace in May 2023, representing an addition of about $11.4 billion by June 2026.
- According to Nairametrics’ earlier evaluation, the rise has been pushed by higher borrowing from multilateral establishments, notably the World Bank, as properly as Eurobond issuances and syndicated financing.
- Nigeria’s whole public debt inventory additionally rose to N166.79 trillion as of June 2026, comprising N91.59 trillion in home debt and N75.19 trillion in external debt.
The Federal Government has additionally been searching for extra external financing, together with a proposed $1.25 billion World Bank mortgage to help reforms in areas such as entry to finance, digital companies, electrical energy, tax and agriculture.
Debt servicing continues to weigh on authorities funds
Beyond the expansion in excellent debt, the price of servicing Nigeria’s obligations stays a significant fiscal concern.
Nigeria spent $5.21 billion servicing external debt in 2025, up from $4.66 billion in 2024, representing an 11.9% enhance, in accordance with knowledge from the Central Bank of Nigeria (CBN).
- The funds accounted for 72.11% of the nation’s whole worldwide funds in 2025, that means almost three out of each 4 {dollars} paid externally went in direction of servicing overseas debt obligations.
- However, curiosity funds elevated by 12.2% to $1.11 billion, accounting for 61.1% of whole external debt service through the six-month interval. Eurobond buyers acquired $645.16 million, making them the biggest single creditor group.
Domestic borrowing has additionally generated vital servicing prices. The DMO reported that Nigeria spent N5.28 trillion servicing home debt within the first half of 2026, with N4.95 trillion going in direction of curiosity and rental funds.
