In the first quarter of 2024, the Federal Government allocated approximately $1.12 billion towards foreign debt service payments, underscoring the escalating strain of external debt on the nation’s financial resources.
Data obtained from the international payment segment of the Central Bank of Nigeria website revealed that debt service payments increased steadily between January and March and over the past few years.
In Q1 2023, debt servicing stood at $801.36m, but in Q1 2024, it shot up by 39.7 per cent to $1.12bn.
A monthly breakdown of the debt service payments reveals a fluctuating yet consistently high expenditure pattern.
The government started 2024 with a significant debt servicing obligation of $560.52m in January. This sum alone exceeded the entire debt servicing expenditure of January 2023 ($112.35m) by nearly five times, underlining the mounting pressure of foreign debt repayments on the nation’s finances.
In February 2024, the debt servicing payments were somewhat moderated but remained substantial at $283.22m. It is lower than January’s massive outflow, and February 2023’s debt servicing of $288.54m.
March 2024 continued the trend but at a lower figure, with Nigeria expending $276.17m on debt servicing. While this represented a slight decrease compared to February and a far lesser decrease from March 2023’s $400.47bn, it was still a notable expenditure, further burdening the country’s fiscal position.
According to data from the Central Bank of Nigeria, out of the $1.61bn in total outflows made during this period, a substantial amount of $1.12bn was directed towards servicing external debt.
This figure represents a hefty slice of the nation’s financial resources and indicates a significant increase from the previous year when it was 49 per cent in Q1 2023.
