Nigeria’s debt servicing payments rose by 69% in the first half of 2024, hitting N6.04 trillion. This marks a sharp increase from N3.58 trillion during the same period in 2023. The rise, likely due to naira devaluation impacting foreign debt repayments, significantly strains government finances, as more funds are directed towards debt obligations.
The Central Bank of Nigeria (CBN) data reveals that debt servicing accounted for 50% of the government’s N12.17 trillion total expenditure in H1 2024. More alarming, it represented 162% of the total revenue, which stood at N3.73 trillion during the same period.
A breakdown of monthly figures highlights the upward trend in debt repayments. In January 2024, debt servicing reached N755.9 billion, up 37% from the N550.3 billion recorded in January 2023. February 2024 saw a slight decrease, with N505.9 billion compared to N518.7 billion in February 2023—however, the overall trend points to rising fiscal pressure.
March 2024 recorded N1.01 trillion in debt servicing, a 12.2% year-on-year increase from N897.9 billion in March 2023. In contrast, April 2024 saw a small drop to N821 billion, down 3.2% from N847.9 billion in April 2023. But May 2024 experienced a significant spike, reaching N2.26 trillion, a 332% surge compared to May 2023. By June 2024, debt servicing had climbed 186% to N689 billion, up from N241.3 billion in June 2023.
This sharp rise in debt repayments underlines Nigeria’s increasing fiscal vulnerability. As more funds are funnelled towards debt servicing, less is available for vital sectors like infrastructure and social services. Additionally, the debt servicing amount surpassing total government revenue raises concerns about Nigeria’s borrowing practices and financial health.
The World Bank has also raised alarms about escalating debt servicing costs in developing nations. Its Chief Economist, Indermit Gill, warned that rising debt levels and high interest rates could lead to economic challenges and force tough financial decisions for countries like Nigeria.
