Nigeria’s foreign exchange reserves are expected to reach $45 billion by the end of 2025, buoyed by renewed investor confidence after the country’s successful $2.3 billion Eurobond issuance, according to investment firm CardinalStone.
In its Macroeconomic Update on the issuance, CardinalStone noted that the strong demand for the Eurobonds—oversubscribed by 5.5 times—underscores growing investor optimism about Nigeria’s economic outlook.
“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,” the firm stated.
“Coupons of 8.62 per cent and 9.13 per cent were set, respectively. The robust demand at the auction indicates that investors are confident in Nigeria’s macroeconomic narrative. Credit rating upgrades from major agencies contributed to this confidence, reflecting a perceived decline in sovereign risk and a bolstering of the country’s credibility in the global debt market.”
CardinalStone forecast that proceeds from the Eurobond issuance will bolster Nigeria’s external reserves and support currency stability through increased reserve accumulation.
“This development bodes well for FX dynamics, particularly in supporting reserve accretion and naira appreciation,” the report stated.
“We project 2025 FX reserves to reach $45.0bn by the end of the year. Importantly, the new Eurobond issuance does not alter our debt outlook for the year, as the planned borrowing was already factored into our projections. We expect a portion of the proceeds to be channelled towards refinancing maturing Eurobonds of $1.1bn on 21 November 2025 and bridging potential budgetary shortfalls.”
CardinalStone projected that Nigeria’s total public debt would reach ₦166.7 trillion by the end of the year, representing 42.2 percent of GDP.
Meanwhile, Comercio Partners hailed the Eurobond’s success as a “positive signal” for Nigeria’s fiscal outlook but cautioned that the benefits could be eroded if exchange rate volatility returns.
“On one hand, the inflow boosts external reserves, provides fiscal breathing space, and enhances the government’s capacity to meet short-term obligations. On the other hand, it raises exposure to foreign exchange risk and heightens interest burdens in hard currency,” Comercio Partners said.
“A renewed bout of FX volatility would not only undermine investor sentiment but also amplify Nigeria’s debt-servicing costs, as depreciation of the naira directly increases the domestic currency burden of external obligations.”
As of June 30, 2025, Nigeria’s total public debt stood at ₦152.40 trillion ($99.66 billion), comprising external debt of $46.98 billion (47 percent) and domestic debt of $52.67 billion (53 percent), according to the Debt Management Office.
The DMO stated that proceeds from the Eurobond issuance will be used to fund the 2025 federal budget and refinance part of Nigeria’s maturing external debt, including the $1.118 billion Eurobond due in November 2025.
Although Nigeria’s debt-to-GDP ratio remains below the 40 percent sustainability threshold, analysts warned that the debt-service-to-revenue ratio—currently above 40 percent—continues to constrain fiscal space and expose the economy to external risks.
Citi (Billing and Delivery), Goldman Sachs International, J.P. Morgan, and Standard Chartered Bank acted as the international bookrunners for the transaction, while Chapel Hill Denham served as the sole Nigerian bookrunner.
