New World Bank figures show that external debt held by Nigerian private enterprises expanded by 179.6 per cent over seven years to reach $54.48 billion. The naira opened under sustained year-end import and travel demand pressure. The two facts are connected. When private firms borrow in dollars, they must repay in dollars. A weaker naira makes every repayment more expensive.
The mechanics matter. Private external debt includes loans to banks, manufacturers, telecoms and oil companies. Some of it funds productive investment. Some of it funds imports and working capital. When the naira depreciates, firms that earn naira but owe dollars face a squeeze. They cut costs, delay investment or pass the burden to consumers. That is how a currency problem becomes a jobs problem.
This mirrors the 2016 recession, when private firms struggled to service dollar loans after the naira was devalued. It also echoes the 2020 COVID-19 borrowing surge, when cheap dollar liquidity encouraged more external debt. The difference now is scale. $54.48 billion is a large exposure for a private sector that still earns most of its revenue in naira. For a manufacturer in Lagos, a 10 per cent depreciation adds millions to repayment costs. For his workers, it means fewer shifts and slower wage growth.
The winners are banks and advisers that arrange the loans; exporters that earn dollars and can service debt easily; and firms that borrowed before the naira weakened. The losers are domestic firms that earn naira and owe dollars; consumers who absorb higher costs; and the CBN, which must manage currency pressure while private borrowers scramble for dollars.
Winners: Banks arranging the loans; dollar-earning exporters; early borrowers.
Losers: Naira-earning firms owing dollars; consumers absorbing costs; the CBN managing currency pressure.
Bottom Line: Private dollar debt is a bet on the naira. That bet is getting more expensive, and workers will feel the losses before shareholders do.