Nigeria’s foreign exchange reserves are projected to climb to $45 billion by the end of 2025, buoyed by strong investor confidence following the country’s successful $2.3 billion Eurobond issuance, investment house CardinalStone has said.
In its latest Macroeconomic Update on the offering, the firm noted that the robust investor appetite for the Eurobond — which recorded a 5.5x oversubscription — reflects renewed optimism about Nigeria’s macroeconomic trajectory.
“The Federal Government of Nigeria returned to the international debt market with a $2.3bn Eurobond offer. Investors’ appetite was strong, with total bids exceeding $12.7bn (excluding joint lead managers’ participation), translating to an impressive 5.5x bid-to-offer ratio,” CardinalStone said.
The report added that coupons were set at 8.62% and 9.13%, respectively, with the strong demand reflecting investor confidence bolstered by recent credit rating upgrades from major agencies.
CardinalStone projected that the Eurobond inflows would strengthen Nigeria’s external position and enhance currency stability through reserve accretion.
“This development bodes well for FX dynamics, particularly in supporting reserve accretion and naira appreciation. We project 2025 FX reserves to reach $45.0bn by the end of the year,” the report stated.
The firm noted that the new borrowing would not alter its debt outlook for 2025, as the issuance was already factored into existing projections. It expects part of the proceeds to be used in refinancing maturing Eurobonds of $1.1bn due in November 2025 and bridging budget shortfalls.
According to CardinalStone, Nigeria’s year-end debt stock is expected to rise to ₦166.7 trillion, equivalent to 42.2% of GDP.
In a separate review, Comercio Partners described the Eurobond success as a “positive signal” for Nigeria’s fiscal position but warned that exchange rate instability could erode the benefits.
“The inflow boosts external reserves and fiscal space but raises exposure to FX risk and increases interest burdens in hard currency,” Comercio Partners stated.
“A renewed bout of FX volatility would not only undermine investor sentiment but also amplify Nigeria’s debt-servicing costs,” it added.
Data from the Debt Management Office (DMO) shows that as of June 30, 2025, Nigeria’s total public debt stood at ₦152.40 trillion ($99.66bn), with external debt accounting for 47% ($46.98bn) and domestic obligations at 53% ($52.67bn).
The DMO confirmed that proceeds from the Eurobond sale would support the 2025 federal budget and refinance part of Nigeria’s maturing external obligations, including the $1.118bn Eurobond due in November 2025.
While Nigeria’s debt-to-GDP ratio remains below the 40% sustainability threshold, analysts cautioned that the debt-service-to-revenue ratio, currently above 40%, continues to strain fiscal flexibility and expose the economy to external shocks.
The international bookrunners for the transaction were Citi (Billing and Delivery), Goldman Sachs International, J.P. Morgan, and Standard Chartered Bank, with Chapel Hill Denham acting as the sole Nigerian bookrunner.
Last week, the National Assembly approved President Bola Tinubu’s request to raise $2.35bn in foreign loans to fund the 2025 budget deficit and refinance maturing Eurobonds, along with a $500m sovereign Sukuk to be issued in the international capital market.
