Nigeria Spends $854 Million Repaying Chinese, World Bank, Other Loans in One Month

• Nigeria’s debt servicing for the month of May 2024 has hit a record four-year high at $854 million 
• Data from the Central Bank of Nigeria show that the country has spent $2.19 billion on debt servicing in the first five months of 2024
• Currently, Nigeria’s external debt stock stands at about $42 billion, with the World Bank and China accounting for the most

Legit.ng’s Pascal Oparada has reported on tech, energy, stocks, investment, and the economy for over a decade.

Data from the Central Bank of Nigeria (CBN) shows that Nigeria spent $854 million in external debt servicing in May 2024, the highest in four years.

The first time Nigeria recorded high debt servicing was in February 2020, when the country spent about $4.43 billion in external debt service.

Nigeria records highest debt servicing

The 2020 figure remains unsurpassed in the data provided by the CBN, dating back to October 12, 2003.

According to reports, the second-highest debt servicing was recorded on November 10, 2006, with $1.52 billion used in external debt servicing.

A monthly analysis of Nigeria’s debt servicing for 2024 shows that in January, the country spent $560 million to service bilateral and multilateral debt obligations.

The country's debt servicing decreased slightly in February 2024. March recorded a lower figure of $276 million, and April's figure dropped further to $215 million.

May 2024 saw a significant surge, with $854 million used for debt servicing, bringing the cumulative total to $2.19 billion in the first five months of 2024.

2023 debt servicing breakdown

In January 2023, debt servicing gulped about $112 million and later spiked to $288 million in February, showing Nigeria’s fluctuating financial obligations.

In March last year, Nigeria's debt servicing escalated to $400 million, $93 million in April, and $221 million in May, showing how the country services its bloated debt stock.

June 2023 showed an adjustment of $54 million, representing the lowest that year. 

However, debt servicing spiked again in July 2023, hitting about $641 million, the highest for 2023.

Nigeria’s debt servicing declined in August 2023, with debt servicing crashing to $310 million and spiking again in September at $439 million.

October recorded $509 million in debt servicing, followed by a decline in November when $368 million was used to repay debts.

Nigeria spent $65 million to service debt in December 2023.

Data from the Debt Management Office (DMO) shows Nigeria’s external debt is about $42. 495 billion, with the World Bank accounting for $14.960 billion and China at $5.167 billion in total debt.

The DMO data also shows that Nigeria's total debt burden was $108.228 billion (about N97.340 billion) as of December 2023.

Nigeria expecting another World Bank loan

A previous report by Legit.ng shows that Nigeria expects another $2.25 billion World Bank loan in June for various developmental projects.

Official documents show that the funds will be shared between two projects to boost Nigeria’s economic stability and resource mobilization capabilities.

One of the projects, reportedly named Nigeria’s Reforms for Economic Stabilisation, is to enable the Transformation (RESET) Development Policy Financing (DPF) and is set to receive $1.5 billion in funding. 

The second project, the NG Accelerating Resource Mobilization Reforms (ARMOR) Programme for Results, is set to get $750 million in funding. Reports say discussions are underway between the lender and the Nigerian government to finalize the terms of the loans.

Earlier data compiled by Legit.ng shows that the Tinubu administration spent $1.24 billion in debt servicing in the first quarter of 2024.

DMO names Nigeria’s largest external creditors

Legit.ng earlier reported that data from the Debt Management Office (DMO) shows that Nigeria’s total public debt is N97.34 trillion, or $108 billion, as of December 2023.

The amount represents a 146% increase from the N39.56 trillion recorded at the end of 2022.

Analysts believe the CBN’s N22 trillion Ways and Means advances significantly contribute to Nigeria’s growing debt, leading to the government devaluing the local currency by about 60%.

Proofread by Kola Muhammed, a journalist and copyeditor at Legit.ng

Source: Legit.ng

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