By Sodiq Adelakun
In a financial twist, Nigeria has reportedly spent a whopping N2.34 trillion on debt servicing within just six months.
This eye-popping figure comes courtesy of a new report by the Debt Management Office (DMO), which has shed light on the country’s debt servicing spending in the second quarter of 2023.
Surprisingly, there was a slowdown in Nigeria’s debt servicing expenses during this period, with a total of N849.58 billion being allocated.
This marks a significant 43.04 per cent decline from the N1.49 trillion spent in the first quarter of the year.
Delving deeper into the data, the DMO revealed that in the first quarter of 2023, Nigeria set aside N874.13 billion for servicing domestic debt and a staggering $801.36 million (equivalent to N617.35 billion) for external debt servicing, resulting in a grand total of N1.24 trillion.
Moving on to the second quarter, Nigeria’s domestic debt servicing expenses amounted to N565.88 billion, while external debt servicing costs reached $368.26 million (N283.7 billion), bringing the combined total to N1.24 trillion, according to the Debt Management Office. It’s worth noting that the exchange rate of the DMO, which stood at $1 to N770.38, was used for external debt servicing.
However, particularly interesting is that no funds were allocated to Chinese loan servicing in the first quarter of 2023, despite around $131.13 million being dedicated to servicing Exim Bank of China loans in the previous quarter.
While the cost of debt servicing may have declined, Nigeria’s public debt continues to soar.
By the end of the second quarter of 2023, it had reached a staggering N87.38 trillion, representing a significant rise of 75.29 per cent or N37.53 trillion compared to the N49.85 trillion reported in March 2023.
The DMO attributes this upward trend in debt partly to the inclusion of N22.71 trillion Ways and Means Advances of the Central Bank of Nigeria to the Federal Government.
With such astronomical figures at play, it is clear that Nigeria’s debt situation is far from being resolved.
In addition, the DMO observed that the increase in the debt stock was primarily due to the Federal Government and sub-national authorities obtaining new loans from both domestic and foreign sources. It is worth mentioning that there was a substantial rise in both domestic and external debt over the course of three months.