Nigeria’s $3bn Eurobond burden under Tinubu raises fiscal pressures 

Nigeria’s growing reliance on Eurobond borrowing under President Bola Tinubu has raised concerns among analysts about the long-term sustainability of the country’s fiscal position.

Data from the Debt Management Office (DMO) show that between Q3 2023 and Q2 2025, the federal government spent approximately $2.93 billion on servicing Eurobond debt, with $2.43 billion – 83 per cent – going to interest payments. Only $500 million went toward reducing the principal.

The figures highlight the high cost of commercial borrowing for Nigeria and the increasing strain on public finances. Eurobond payments alone accounted for an average of 31.5 per cent of Nigeria’s total external debt service of $9.32 billion over the period, according to the DMO’s records.

Q3 2023, the first full quarter of Tinubu’s administration, was the costliest, with Nigeria paying $943.66 million in Eurobond obligations, including $500 million in principal and $443.66 million in interest. That represented nearly 68 per cent of total external debt servicing for the quarter. While Q4 2023 saw a sharp decline in Eurobond payments, subsequent quarters experienced repeated spikes, notably $427.72 million in Q3 2024 and Q1 2025. Analysts say the concentration of repayments in certain periods, combined with high-interest costs, underscores the fiscal pressure posed by Eurobond obligations.

Nigeria’s Eurobond stock rose to $17.32 billion by June 2025, accounting for 36.86 per cent of the country’s total external debt, up from $15.62 billion in June 2023. The increase reflects both refinancing of maturing bonds and fresh borrowing, including a $2.35 billion dual-tranche issuance in November 2025. The 10- and 20-year notes, priced at 8.63 per cent and 9.13 per cent, attracted $13 billion in orders from investors across Europe, North America, Asia, and Africa, marking Nigeria’s largest international capital-market subscription to date.

Government officials, including President Tinubu and Finance Minister Wale Edun, hailed the strong investor response as a vote of confidence in Nigeria’s economy. DMO Director-General Patience Oniha emphasized that long-term financing through Eurobonds supports economic growth while reducing pressure on short-term domestic borrowing.

However, experts warn that the benefits may be outweighed by risks. Financial analyst Dayo Adenubi in an interview with Punch described Eurobonds as “market-driven financing” that provides quick access to capital but at high cost, noting that principal repayments are postponed until maturity, which often leads to serial refinancing. “If the funded projects fail to meet expected returns, debt stress could escalate quickly,” he said.

Other analysts, including Olatunde Amolegbe of Arthur Stevens Asset Management, acknowledged that Eurobonds offer flexibility and speed compared with multilateral loans but stressed the need for careful debt management and disciplined use of funds.

Economist Adewale Abimbola noted to Punch that external commercial borrowing is viable if interest and currency risks are managed, but cautioned that overreliance on Eurobonds could crowd out public investment in critical sectors.

As Nigeria continues to tap the international debt market, the challenge remains balancing immediate fiscal relief against long-term repayment obligations.

Experts say without careful management, Eurobond debt could become a persistent drain on resources, limiting government spending on infrastructure, social services, and economic development.