The Federal Government spent $1.12 billion on foreign debt service payments in the first quarter of 2024.
This brought to the fore the growing burden of external debt on the country’s finances.
A data from the international payment segment of the Central Bank of Nigeria ( CBN) website revealed that debt service payments increased steadily between January and March.
The monthly breakdown of the debt service payments highlights a fluctuating yet consistently high expenditure pattern by the government.
In January, the country spent $560.52 million on foreign debt servicing, the figure came down to $283.22 million the following month before coming further down to $276.17 million in March 2024.
However, the significant debt servicing obligation of $560.52 million in January was in contrast to the $112 million in the corresponding period in 2023 by nearly 500%.
In February, the debt servicing payments were somewhat moderate but remained substantial at $283.22 million.
It is lower than January’s massive outflow, and February 2023’s debt servicing of $288.54 million.
March 2024 continued the trend but at a lower figure, with Nigeria expending $276.17 million on debt servicing.
While this represented a slight decrease compared to February and a far lesser decrease from March 2023’s $400.47 billion, it was still a notable expenditure, further burdening the country’s fiscal position.
It would be recalled that the Debt Management Office DMO had stated that Nigeria incurred a debt service of $3.5 billion for its external loans in 2023.
This was a 55 percent increase from the $2.6 billion incurred in 2022 as debt service-related payments for the country’s external debts.
By: Babajide Okeowo
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