According to the most recent data from the Central Bank of Nigeria (CBN), the Federal Government has spent a total of $15.55 billion on debt servicing between 2019 and 2024.
In 2019, Nigeria paid $588.33 million in debt service between January and May, while the payment for 2020 was $5.40 billion.
The country’s debt service payments increased in the following years, with $2.02 billion paid in 2021, $2.34 billion in 2022, and $3.43 billion in 2023. In 2024, between January and May, the country paid $2.18 billion in debt service, according to CBN data.
This represents a 270.9% increase from the $588.33 million in debt service during the first five months of 2019. The $2.18 billion in May 2024 is almost half of the $4.8 billion projected by Fitch Ratings for the year.
The administration claims to be focussing on domestic borrowing, but this growth persists.
Fitch Ratings has expressed worries regarding Nigeria’s debt sustainability, estimating that the country’s foreign debt servicing will increase by $400 million to $5.2 billion in the upcoming year.
The FG spent $5.40 billion, or the most of any country in the last five years, on debt financing in 2020, according to the CBN International Payments Data.
Nigeria’s external debt service payments saw a significant increase of $1.1bn, reaching $3.5bn in 2023, according to FBNQuest Research.
This breakdown comprises $1.9bn in market debt payments and $1.6bn in non-market debt payments. Furthermore, the Federal Government aims to take on extra external debt, including N1.8tn in commercial borrowing and N1.1tn in concessional loans, as detailed in the 2024 budget.
Because of the government’s intentions to access the commercial debt markets and the expected rise in borrowing from concessional sources, FBNQuest Research anticipates an additional increase in external debt service payments, in line with Fitch Ratings’ projections.
The World Bank recently gave the country $2.25 billion to promote President Bola Tinubu’s economic reforms.
The two-pronged packages consist of $750 million for the Nigeria Accelerating Resource Mobilisation Reforms Program-for-Results and $1.5 billion for the Nigeria Reforms for Economic Stabilisation to Enable Transformation Development Policy Financing Programme.
The Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun, said, “We have undertaken bold and necessary reforms to restore macroeconomic stability and put Nigeria on a path to sustainable and inclusive economic growth. These reforms will create quality jobs and economic opportunities for all Nigerians.”
This loan, described as “virtually a grant” by Edun, is expected to support the government’s economic reforms and development initiatives.
The report noted that the principal programme development objective is to raise non-oil revenues and safeguard oil and gas revenues.
