External Debt Servicing is Now $2.78 Billion – CBN Report.
Nigeria’s debt servicing in the first seven months of 2024 increased by 53.63%, amounting to an additional $971.47 million, bringing the total to $2.78 billion. This represents a significant rise from the $1.81 billion recorded during the same period in 2023. The information was disclosed through the Weekly International Payments data available on the Central Bank of Nigeria’s website.
According to the data from the Central Bank, the highest amount spent on external debt servicing occurred in May, totaling $854.36 million. This was followed by payments of $560.51 million in January and $542 million in July. In contrast, debt servicing in February, March, and April remained below $300 million, with the lowest payment recorded in June 2024 at just $50.82 million.
In the previous year, the highest external debt servicing payment was $641.69 million in July 2023, with March 2023 following closely at $400.47 million. Other months also saw payments below the $300 million mark, with June 2023 having the lowest at $54.35 million. This trend of lower payments was mirrored in the current year.
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Debt servicing constitutes a substantial portion of the weekly international payments made by the Central Bank of Nigeria. The Debt Management Office (DMO) reported that Nigeria’s total public debt reached N121.67 trillion ($91.46 billion) by the end of the first quarter of 2024.
The DMO’s report indicated that this figure represents a significant increase from the previous total of N97.34 trillion ($108.23 billion) as of December 31, 2023. Within this total, domestic debt accounted for N65.65 trillion ($46.29 billion), while external debt was recorded at N56.02 trillion ($42.12 billion).
The DMO clarified that the increase in public debt, amounting to N24.33 trillion, is often misinterpreted as new borrowing. In reality, it includes new borrowing of N2.81 trillion as part of the N6.06 trillion provided in the 2024 Appropriation Act. Additionally, it encompasses new domestic borrowing of N4.90 trillion, related to the securitization of the N7.3 trillion Ways and Means Advances approved by the National Assembly.
Furthermore, the depreciation of the official naira exchange rate, which fell from $/N899.39 in Q4 2023 to $/N1,330.26 in Q1 2024, also contributed to the increase in the debt figures. This depreciation has significant implications for the country’s overall debt burden.
The Director of Research and Strategy at Chapel Hill Denham, Tajudeen I, has emphasized the importance of understanding these figures in the context of Nigeria’s economic landscape and the challenges posed by rising debt servicing costs.
