The Central Bank of Nigeria (CBN) has released data revealing that the Federal Government expended a total of $15.55 billion on debt servicing between 2019 and 2024.
This figure underscores the substantial financial commitment Nigeria has made towards servicing its debt obligations amidst fiscal challenges.
According to the CBN’s latest International Payments Data, the breakdown of debt service payments over the five-year period is as follows:
In 2019, Nigeria paid $588.33 million from January to May. The following year, 2020, recorded the highest payment within the period with $5.40 billion allocated to debt servicing.
Subsequent years also saw significant sums disbursed: $2.02 billion in 2021, $2.34 billion in 2022, and $3.43 billion in 2023. Between January and May 2024, the country has already disbursed $2.18 billion.
This year-on-year increase in debt servicing expenditures has been notable, with the payments for the first five months of 2024 representing a 270.9 percent rise compared to the corresponding period in 2019.
Despite the government’s emphasis on increasing domestic borrowing, external debt servicing remains a substantial financial commitment.
Fitch Ratings projects a further escalation in Nigeria’s external debt servicing by $400 million to $5.2 billion next year, raising concerns about the sustainability of Nigeria’s debt profile.
FBNQuest Research highlighted that Nigeria’s external debt service payments saw a significant increase to $3.5 billion in 2023, comprising $1.9 billion in market debt payments and $1.6 billion in non-market debt payments.
In line with the 2024 budget, the Federal Government plans to incur additional external debt, including N1.8 trillion in commercial borrowing and N1.1 trillion in concessional loans. This strategy is expected to further augment the country’s debt service obligations in the coming years.
Recently, Nigeria secured a $2.25 billion financial package from the World Bank to bolster economic reforms initiated by President Bola Tinubu.
The funding includes $1.5 billion for the Nigeria Reforms for Economic Stabilization to Enable Transformation Development Policy Financing Program and $750 million for the Nigeria Accelerating Resource Mobilization Reforms Program-for-Results.
As Nigeria navigates its economic landscape, the focus remains on implementing robust fiscal measures to mitigate debt sustainability risks while fostering economic resilience and growth.
For further details and insights, stakeholders are encouraged to review the comprehensive CBN report on Nigeria’s debt servicing expenditures from 2019 to 2024.