Data from the Central Bank of Nigeria indicates that the Nigerian Federal Government spent $15.55bn on debt servicing between 2019 and 2024. In 2019, Nigeria paid $588.33m in debt service between January and May, while the payment for 2020 was $5.40bn.
The debt service payments continued to rise in subsequent years, with $2.02bn paid in 2021, $2.34bn in 2022, and $3.43bn in 2023. According to the CBN data, Nigeria paid $2.18bn in debt service between January and May 2024.
This is a 270.9 percent increase compared to $588.33m in the first five months of 2019, while the $2.18bn in May 2024 is nearing half of the $4.8bn projected by Fitch Ratings.
This increase is despite the government’s assertions that it is shifting its focus towards domestic borrowing. Fitch Ratings also predicts that the country’s external debt servicing will escalate by $400m to $5.2bn next year, raising concerns about Nigeria’s debt sustainability.
FBNQuest Research expects a further increase in external debt service payments, mirroring Fitch Ratings’ predictions, due to the government’s plans to access commercial debt markets and anticipated growth in borrowings from concessional sources. Recently, the government received $2.25bn from the World Bank to support President Bola Tinubu’s economic reforms.
In response, the Minister of Finance and Coordinating Minister of the Economy, 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.”
Wale Edun further explained that the loan, described as “virtually a grant,” is to aid the government’s economic reforms and development goals,, including raising non-oil revenues and safeguarding oil and gas revenues.
