By David Akinmola
Nigeria is set to face significant debt service obligations in the final quarter of 2025, as a $1.12 billion Eurobond and a N100 billion domestic Sukuk issuance reach maturity, raising fresh concerns over the country’s debt sustainability and refinancing strategy.
The Eurobond, originally issued in 2015 with a ten-year tenor, represents one of Nigeria’s largest external debt repayments since 2022, while the maturing Sukuk adds to the burden on domestic finances already strained by rising interest rates and exchange rate volatility.
Analysts say the approaching maturities could test the federal government’s fiscal discipline and debt management capacity, especially amid dwindling oil revenues and persistent naira depreciation.
“The key challenge will be how Nigeria manages refinancing without exerting pressure on reserves or crowding out private sector credit,” said a Lagos-based economist, noting that the government may need to explore alternative funding mechanisms or seek concessional loans to ease liquidity strain.
Nigeria’s total public debt stood at N97.34 trillion as of June 2025, according to data from the Debt Management Office (DMO), with external debt accounting for about 40 percent of the total. The DMO has repeatedly assured investors of the government’s ability to meet all obligations as due, citing proactive debt service planning and a mix of refinancing options.
However, fiscal analysts warn that the Eurobond maturity could coincide with a period of elevated global interest rates, making refinancing costlier. At the same time, the domestic Sukuk repayment could tighten liquidity in the local bond market, driving up yields.
The maturing Sukuk, issued to fund critical infrastructure projects, is part of the government’s broader effort to deepen the non-interest capital market. Yet, its repayment in late 2025 is expected to compete with other borrowing needs, including budget deficit financing.
With the new administration pushing for economic reforms under the Insurance Reform Act, foreign exchange liberalisation, and revenue diversification, market watchers say how Nigeria handles the dual maturities will serve as a litmus test for its fiscal credibility and investor confidence heading into 2026.
