The external debt of developing countries rose by 5.5 per cent to a record $9.4 trillion in 2025, marking the fastest increase since 2021, according to the World Bank Group’s International Debt Report (IDR) 2026. The report, released on Thursday, November 5, 2026, said the increase was about four times the average recorded between 2022 and 2024, warning that rising debt burdens could undermine investment in essential services and human development.
The report attributed much of the increase to private financing, noting that bond issuance by public entities climbed nearly 35 per cent to $251 billion, the highest level in five years. Debt rose fastest in the most vulnerable economies, with external debt in countries eligible for concessional financing from the International Development Association (IDA) increasing by 8.1 per cent to $1.3 trillion.
World Bank Chief Statistician and Director of Development Data, Haishan Fu, said the return of private lending was welcome but came at significant financial cost, leaving many countries with less funding for long-term development.
Nigeria’s external debt stock stood at $145.015 billion in 2025, representing a 6.6 per cent increase from 2024 and rising from $83.213 billion in 2015, the report said. Of the total, $62.4 billion was public and publicly guaranteed debt, while private nonguaranteed debt accounted for $54.674 billion and short-term debt $28.139 billion. China was Nigeria’s largest bilateral creditor, with $5.672 billion, while multilateral creditors accounted for $31.365 billion in public debt, including $18.533 billion owed to the World Bank’s IDA.
The report said Nigeria’s external debt-to-Gross National Income ratio stood at 51 per cent, while external debt was equivalent to 212 per cent of exports of goods, services and primary income. Debt service payments accounted for 19 per cent of exports in 2025, highlighting the pressure of repayment obligations on foreign exchange earnings. It added that new borrowing costs varied significantly, with loans from official creditors averaging 1.9 per cent interest compared with 9.6 per cent for private creditors.
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