Nigeria has spent $2.78 billion on servicing foreign debt in the first seven months of 2024, according to the international payment statistics of the Central Bank of Nigeria.
This amount is 64% of the total $4.36 billion official dollar payments made between January and July 2024 by the Apex Bank on behalf of the Nigerian government.
In the same period last year, Nigeria spent 46% of its total international payments on debt service, which means that there is an increase of 39.13% in 2024.
The rise in the percentage suggests that Nigeria’s foreign debt servicing obligations have grown significantly, outpacing the increase in overall international payments.
This could be due to various factors, such as an increase in the total debt stock, higher interest rates on existing debt, or changes in the payment schedules that have led to more immediate debt servicing requirements.
In January 2024, the external debt servicing payment surged to $560.52 million, a 399% increase from the $112.35 million recorded in the same month of the previous year.
It further constituted 74% of the total international payments of $757.41 million made in the same month. This trend, although fluctuating, remained significant as the months progressed.
This relief was again short-lived as July 2024 saw debt servicing rise to $542.50 million, which represented a substantial 78% of the $694.45 million total international payments. However, it was a 15% decrease compared to the $641.70 million paid in July 2023.
Over the entire seven-month period from January to July, Nigeria’s total debt servicing costs in 2024 amounted to $2.78 billion, reflecting a 19% increase from the $1.81 billion spent during the same period in 2023.
This overall rise highlights the escalating burden of debt servicing on Nigeria’s finances and highlights the growing challenge of managing the country’s external debt amid increasing global financial pressures.