Nigeria’s exposure to syndicated loans has risen dramatically within a year, jumping from $133.66m in March 2025 to $2.86bn by March 2026, as the Federal Government increasingly turned to commercial financing to fund major infrastructure projects.
An analysis of data published by the Debt Management Office (DMO) showed that the increase amounted to $2.73bn, representing a staggering 2,041 per cent rise in 12 months.
The surge has significantly changed the structure of Nigeria’s external debt. Syndicated loans, which accounted for only 0.29 per cent of the country’s total external debt in March 2025, represented 5.51 per cent of the $51.90bn external debt stock by March 2026.
The development comes against the backdrop of growing scrutiny of Nigeria’s debt position, particularly the cost of servicing the obligations as the government seeks additional financing for infrastructure and other development projects.
Data from the DMO showed that Nigeria’s total external debt stood at $45.98bn as of March 31, 2025. Of this amount, $22.43bn was owed to multilateral institutions, while bilateral debt stood at $6.03bn and commercial obligations amounted to $17.51bn.
The commercial component consisted largely of Eurobonds, which accounted for $17.32bn, while syndicated loans stood at $133.66m. Another $54.36m was listed as owed to Deutsche Bank.
At that point, syndicated borrowing remained a relatively small component of Nigeria’s overall external debt.
That position, however, changed sharply over the following months.
By December 2025, the DMO had recorded $2.51bn under “Syndicated Loans (Projects)”. The debt data also showed $4.63m owed to Standard Chartered Bank and $159.97m to UniCredit SPA.
Taken together, the identifiable syndicated facilities amounted to approximately $2.68bn, excluding a separately listed $56.09m Deutsche Bank facility.
The $2.68bn represented about 5.16 per cent of Nigeria’s $51.86bn external debt at the end of 2025, a substantial increase from the 0.29 per cent recorded nine months earlier.
The exposure increased further in the first quarter of 2026.
In its March 2026 report, the DMO placed the facilities under a separate “Syndications” category and identified four major creditors.
First Abu Dhabi Bank emerged as the largest creditor, with an exposure of $1.87bn. It was followed by the African Export-Import Bank (Afreximbank) with $637.82m, UniCredit SPA with $319.27m and Standard Chartered Bank PLC with $30.51m.
The four facilities totalled $2.86bn, equivalent to 5.51 per cent of Nigeria’s $51.90bn external debt stock.
Deutsche Bank’s $52.11m exposure was again reported separately.
Syndicated loans outpace overall debt growth
The scale of the increase becomes more apparent when compared with the movement in Nigeria’s overall external debt.
Between March 2025 and March 2026, the country’s external debt increased from $45.98bn to $51.90bn, a rise of approximately 12.9 per cent.
Syndicated borrowing, however, expanded by more than 2,000 per cent over the same period.
The $2.73bn increase in syndicated facilities accounted for about 46 per cent of the $5.93bn increase in Nigeria’s total external debt during the 12-month period.
Syndicated loans are financing arrangements in which several financial institutions jointly provide funds to a borrower, allowing the lenders to share the financing and associated risks.
The structure is generally used for large transactions that may be too substantial for a single lender to finance. For governments, syndicated facilities can provide access to sizeable pools of capital for major infrastructure projects.
In Nigeria’s case, the sharp increase coincided with the Federal Government’s financing arrangements for the Lagos-Calabar Coastal Highway.
Coastal highway drives commercial financing
In July 2025, the Federal Government secured a $747m syndicated loan for Phase 1, Section 1 of the Lagos-Calabar Coastal Highway.
The first section covers 47.47 kilometres from Victoria Island to Eleko Village in Lagos.
At the time, the government described the transaction as the first syndicated road infrastructure loan of its size in Nigeria.
Deutsche Bank served as global coordinator, initial mandated lead arranger and bookrunner. Other participants included First Abu Dhabi Bank, Afreximbank, the Abu Dhabi Exports Office, ECOWAS Bank for Investment and Development, Nexent Bank and Zenith Bank.
The Islamic Corporation for the Insurance of Investment and Export Credit (ICIEC) provided partial political and commercial risk insurance for the transaction.
Speaking when the financing was announced, the immediate past Minister of Finance, Wale Edun, said the transaction demonstrated renewed international confidence in Nigeria’s infrastructure financing market.
“This deal reflects the success of our macroeconomic reforms and the return of international capital to support Nigeria’s development. We are focused on financing infrastructure in ways that are sustainable, transparent, and catalytic—and this transaction is a model of that vision in action,”
Works Minister David Umahi also described the facility as an endorsement of the administration’s economic reforms.
“This transaction is a vote of confidence in Nigeria’s economic reform agenda,”
A second major financing arrangement followed in December 2025, when the government closed a $1.126bn facility for Phase 1, Section 2 of the coastal highway.
The second section stretches approximately 55.7 kilometres from Eleko to Ode-Omi.
First Abu Dhabi Bank and Afreximbank fully underwrote the facility, contributing $626m and $500m respectively, with ICIEC providing partial risk mitigation.
The two transactions brought the financing secured for the first two sections of the coastal highway to $1.873bn.
The scale of these facilities helps explain the rapid expansion in Nigeria’s syndicated borrowing during the period under review.
Debt servicing raises fresh concerns
The increase in commercial borrowing comes at a time when Nigeria is already committing substantial resources to servicing its existing external obligations.
Earlier data showed that Nigeria spent approximately $5.21bn servicing external debt in 2025, accounting for more than 72 per cent of the country’s total international payments during the year.
Figures published by the Central Bank of Nigeria showed that external debt service increased from $4.66bn in 2024 to $5.21bn in 2025.
That represented an increase of $551.86m, or about 11.9 per cent, within one year.
The growing reliance on commercial financing therefore adds to concerns about the future cost of debt servicing, particularly where new facilities carry higher costs than concessional financing from multilateral institutions.
Government officials, however, have maintained that the critical issue is not simply the amount borrowed but what the funds are used for, the cost of the financing and the returns generated by the investment.
Oyedele: Focus on what borrowing finances
The Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, recently criticised what he described as an overly simplistic approach to assessing government borrowing.
Speaking in Abuja at the Fellowship Award Ceremony and 2nd Biennial Conference of the Capital Market Academics of Nigeria, Oyedele argued that analysts should consider the purpose and cost of borrowing as well as the expected economic returns.
“When analysts go on TV and join the populist view to accuse the government of borrowing, you are doing a disservice. The relevant question is never simply how much debt.
“It is always debt for what and at what cost, against what return, and repaid on what terms. A nation, a state, or a business that borrows to finance a productive asset generating returns above the cost of that capital is not behaving recklessly; it is behaving rationally.”
The argument underscores the Federal Government’s position that borrowing for productive infrastructure can be justified where the resulting economic activity and revenues are sufficient to outweigh the cost of the debt.
For Nigeria, however, the rapid rise in syndicated loans means that the success of that strategy will increasingly depend on whether the infrastructure financed through commercial borrowing delivers the expected economic benefits while keeping future debt-servicing pressures manageable.