Across Africa, there are many economic perturbations. In Nigeria, recently, we have seen how rising energy costs, forex paralysis, and other vectors, are affecting the abilities of small and medium scale enterprises (SMEs) to pursue their strategic missions in the market.

According to the nation’s tax agency, FIRS, more than N1.7 trillion revenue disappeared in 2023, and thousands of companies faded in the broad manufacturing industry.  It goes beyond Nigeria as there are pockets of “turbulence” everywhere, for SMEs, fuelled by wars, insecurity or even technology.

The implications of these economic turbulence are huge, not just to the state’s revenue, but also to the companies. Today, at Tekedia Mini-MBA, our Faculty, Dr Abel Osuji, from Afreximbank, Africa’s bank of this decade, in our opinion, will be teaching on “Sustainability Strategies for SMEs During Economic Challenges”. Zoom in the class board.

Tekedia Mini-MBA >> our product is Knowledge

The Central Bank of Nigeria (CBN) has revealed in its Fourth Quarter 2024 Economic Report, published on Monday, that Nigeria’s external debt has soared to N66.14 trillion—equivalent to $43.03 billion—as of Q3 2024.

Pegged at 23.14% of the country’s GDP, this disclosure has amplified mounting concerns over Nigeria’s spiraling public debt, igniting debates about fiscal responsibility and the tangible benefits of such heavy borrowing.

The latest figure marks a 0.30% uptick from the $42.90 billion recorded in Q2 2024, a subtle yet persistent climb that reflects Nigeria’s growing appetite for foreign loans. On a year-on-year basis, the debt has swelled by 3.40%, up from $41.59 billion in Q3 2023. This steady ascent paints a picture of a nation increasingly tethered to international creditors to bridge fiscal gaps and fuel development dreams—a reliance now under intense scrutiny.

Adding fuel to the fire, the World Bank recently approved a $500 million loan to Nigeria under its Social Protection Support Project, announced in March 2025. Aimed at bolstering vulnerable households through cash transfers and social safety nets, this injection is set to push Nigeria’s external debt even higher, nudging it toward an estimated $43.53 billion by mid-2025.

While the loan promises relief for the nation’s poorest, it also widens an already burdensome debt-servicing load. By September 2024, Nigeria had already forked out $1.34 billion to service its external debt, split between $0.72 billion in principal repayments (53.73%) and $0.62 billion in interest (46.27%). With commercial borrowings devouring $0.44 billion of that interest tab—nearly 71%—the addition of fresh loans like the World Bank’s only deepens the fiscal strain.

A closer look at Nigeria’s debt stock reveals a complex web of creditors. Multilateral loans, led by heavyweights like the World Bank, IMF, and African Development Bank, dominate at $21.77 billion, or 50.60% of the total. Commercial loans, mostly Eurobonds, follow at $15.12 billion (35.14%), while bilateral loans contribute $5.81 billion (13.50%). A smaller slice, $0.33 billion (0.76%), comes from syndicated loans via the African Finance Corporation. This diverse borrowing portfolio underscores Nigeria’s multifaceted approach to financing, but it’s the rising cost of repayment that’s ringing alarm bells.

For many Nigerians, the CBN’s revelation and the World Bank’s latest largesse crystallize a gnawing frustration: despite billions in loans, there’s little to show for it. From debilitated roads to underfunded hospitals, citizens point to a glaring absence of transformative projects tied to this debt.

Posts on X echo the sentiment of users decrying a government accused of borrowing for consumption rather than investment. The borrowed funds are believed to vanish into recurrent spending—salaries, subsidies, and operational costs—rather than infrastructure or industry that could spur growth and repay the debt.

The numbers bear out the challenge. In Q3 2024 alone, debt servicing consumed $1.34 billion, a figure dwarfed only by the $5.47 billion spent between January 2024 and February 2025, according to CBN data. Commercial loans, with their hefty interest rates, are a particular sore point, raising questions about long-term sustainability.

Meanwhile, multilateral loans, though often concessional, still demand repayment—$0.12 billion in interest in Q3 2024—while bilateral deals add to the mix. As the debt pile grows, so does the portion of national revenue siphoned off to creditors, leaving less for infrastructure development.

This is seen as not just a ledger issue—but a national dilemma. Nigeria’s dependence on foreign financing, driven by fiscal constraints and uneven oil revenues, has locked it into a cycle of borrowing to survive. Yet, the World Bank’s $500 million lifeline, while supposedly a balm for the vulnerable, risks becoming another weight on an overburdened economy.

Experts have recommended increased oil output, economic diversification, and improved tax revenue as solutions.