Nigeria’s FX direct remittances surges to $180m
…As FG spends ¦ 8.47trn on external debt servicing
By Seun Ibiyemi
Nigeria has allocated approximately ¦ 8.47 trillion ($5.47 billion) towards external debt servicing between January 2024 and February 2025, underscoring the mounting pressure on government revenue and the nation’s foreign reserves, according to data from the Central Bank of Nigeria (CBN).
Figures from the apex bank indicate that debt service payments fluctuated throughout the period, with May 2024 recording the highest single-month payment of $854.37 million, while June 2024 saw the lowest at $50.82 million.
During the third quarter of 2024 alone, total debt service expenditure amounted to ¦ 3.57 trillion, reflecting a quarter-on-quarter rise of ¦ 60 billion (1.71 per cent) from the ¦ 3.51 trillion recorded in the second quarter.
Further scrutiny revealed that debt servicing declined by 22.1 per cent to $215.20 million in April 2024 before surging by 297 per cent to $854.37 million in May. The figure then plummeted by 94 per cent to $50.82 million in June, only to escalate by 967.4 per cent to $542.50 million in July.
These fluctuations persisted over the months, with payments peaking at $540.67 million in January 2025 before dropping by 48.8 per cent to $276.73 million in February.
The CBN observed that these inconsistencies in debt payments reflect ongoing pressure on Nigeria’s foreign exchange reserves, further compounded by currency depreciation.
Meanwhile, total foreign exchange (FX) direct remittances into Nigeria increased by 1.3 per cent year-on-year (YoY) to $180.03 million in the first two months of 2025, according to CBN statistics.
A breakdown of the data showed that remittances in January 2025 stood at $54.44 million, a significant decline from the $138.56 million recorded in January 2024. However, remittance inflows rebounded in February 2025, climbing by 220.8 per cent to $125.59 million compared to $39.15 million in February 2024.
Despite concerns over the downturn in total remittances throughout 2024—when inflows dropped to $1.91 billion from $1.98 billion in 2023—the increase in early 2025 suggests that the CBN’s ongoing foreign exchange policy reforms may be bolstering forex inflows.
Economists caution that the escalating cost of debt servicing could further strain Nigeria’s already limited fiscal capacity, diverting more government revenue towards debt repayments rather than critical infrastructure and social investments.
“The strain on external reserves and the fluctuations in debt service payments illustrate Nigeria’s persistent challenges with foreign exchange liquidity and the consequences of currency depreciation,” stated financial analyst Dr. Musa Adebayo.
As the government works to stabilise the economy, policymakers continue to explore strategies to enhance revenue generation, increase foreign exchange inflows, and reduce dependence on external borrowing to alleviate the nation’s rising debt burden.
