Business
Debt Servicing: $15bn Spent In 5 Yrs – CBN
The Central Bank of Nigeria (CBN), has said the Federal Government has spent a total of $15.55billion on debt servicing between 2019 and 2024.
This is according to the latest data from the nation’s Apex bank, which revealed that in 2019, Nigeria paid $588.33million in debt service between January and May, while the payment for 2020 was $5.40bn.
According to the data, debt service payments continued to rise in subsequent years, with $2.02bn paid in 2021, $2.34bn in 2022, and $3.43bn in 2023.
The data further disclosed that between January and May 2024, the country has paid $2.18bn in debt service.
This is 270.9 per cent increase compared to the first five months of 2019 which was $588.33m.
The $2.18bn in May 2024 is about half of the $4.8bn projected by Fitch Ratings for the year.
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.
According to the CBN International Payments Data, the FG spent the highest on debt financing within the last five years in 2020 which amounted to $5.40bn.
Nigeria’s external debt service payments saw a significant increase of $1.1bn, reaching $3.5bn in 2023, report has also revealed.
Recently, the government received $2.25bn from the World Bank to support President Bola Tinubu’s economic reforms.
The two-fold packages include $1.5bn for the Nigeria Reforms for Economic Stabilization to Enable Transformation Development Policy Financing Program and $750m for the Nigeria Accelerating Resource Mobilization Reforms Program-for-Results.
“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”, the Minister of Finance and Coordinating Minister of the Economy, Wale Edun, said.
Corlins Walter