Nigeria spends $1.12bn on servicing foreign debts in Q1, 2024

Nigeria has spent about $1.12 billion on foreign debt service payments in the first quarter of 2024, highlighting the growing burden of external debt on the nation’s finances.

Data from the Central Bank of Nigeria (CBN) reveal that debt service payments have been steadily rising over the past few years. In Q1 2023, debt servicing stood at $801.36 million, but in Q1 2024, it shot up by 39.7 percent to $1.12 billion.

A monthly breakdown of the debt service payments reveals a fluctuating yet consistently high expenditure pattern.

Nigeria started 2024 with a significant debt servicing obligation of $560.52 million in January. This sum alone exceeded the entire debt servicing expenditure of January 2023 ($112.35 million) 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 $283.22 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 far lesser decrease from March 2023’s $400.47 billion, it was still a notable expenditure, further burdening the country’s fiscal position.

It was further observed that Nigeria spent about 70 percent of its dollar payments to service external debts between January and March 2024.

According to data from the Central Bank of Nigeria (CBN), out of the $1.61 billion in total outflows made during this period, a substantial amount of $1.12 billion 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 percent in Q1 2023.