Nigeria’s Rising Foreign Debt Exposure Hits US$90.2bn as Portfolio Inflows Surge

Nigeria’s rising foreign debt exposure reached US$90.2 billion in 2025 as increased foreign investments in government debt securities widened the country’s net foreign liability position, according to the Central Bank of Nigeria (CBN).

The CBN, in its latest International Investment Position (IIP) report, said Nigeria’s net foreign liability position increased from US$82.7 billion in 2024 to US$90.2 billion in 2025, reflecting stronger foreign claims on domestic assets than Nigerian investments abroad.

The report showed Nigeria held US$125.6 billion in external financial assets compared with US$215.8 billion in foreign liabilities, resulting in a US$7.5 billion year-on-year increase in the country’s net liability position.

The apex bank attributed the increase mainly to a surge in portfolio investment liabilities, as foreign investors expanded holdings of Nigerian debt instruments, particularly Open Market Operation (OMO) bills, attracted by the country’s elevated interest rates.

Portfolio investment liabilities rose by US$10.1 billion during the year, making it the largest contributor to the widening liability position.

Direct investment liabilities also increased by US$6.7 billion, indicating higher foreign direct investment positions in Nigerian companies and suggesting sustained investor confidence despite macroeconomic challenges.

The CBN said the deterioration in Nigeria’s external liability position was partly offset by stronger reserve assets and increased overseas investments by Nigerian residents.

According to the report, reserve assets expanded by US$5.6 billion in 2025, strengthening Nigeria’s external buffers and improving its capacity to withstand external shocks.

Nigeria also recorded an additional US$3.3 billion increase in direct investments, portfolio investments and other foreign assets held abroad, providing further support to the country’s external asset position.

The International Investment Position measures the value of a country’s external financial assets and liabilities at a specific point in time, unlike the Balance of Payments, which records transactions over a reporting period.

The CBN said stronger foreign capital inflows continued to improve Nigeria’s external liquidity and support exchange rate stability.

However, it warned that the rapid increase in portfolio investment liabilities has raised the economy’s exposure to shifts in global financial conditions, particularly changes in international interest rates and investor risk appetite.

Portfolio investments are generally regarded as more volatile than foreign direct investment because they can exit an economy quickly during periods of global uncertainty.

The apex bank said sustaining improvements in Nigeria’s external position would depend on attracting more long-term foreign direct investment, strengthening non-oil export earnings and maintaining external reserve accumulation.

It added that continued strength in international crude oil prices could further improve Nigeria’s external position through stronger export receipts, higher foreign exchange inflows and increased reserve buffers.