Nigeria’s Debt Servicing Hits Four-Year High of $854M in May 2024
Nigeria’s debt servicing for May 2024 has hit a record high of $854 million, the highest in four years, according to data from the Central Bank of Nigeria (CBN). The country has spent a total of $2.19 billion on debt servicing in the first five months of 2024, reflecting a significant financial commitment.
As of December 2023, Nigeria’s external debt stood at about $42 billion, with major creditors including the World Bank and China. The country’s total public debt was recorded at $108.228 billion (N97.340 trillion), marking a substantial increase from previous years.
High Debt Servicing in 2024
Data from the CBN reveals that Nigeria’s debt servicing payments have fluctuated throughout 2024:
- January: $560 million
- February: $276 million
- March: $215 million
- April: $276 million
- May: $854 million
This monthly breakdown shows a significant surge in May 2024, bringing the cumulative total for the first five months to $2.19 billion. This marks the highest debt servicing payment since February 2020, when the country spent about $4.43 billion.
Historical Context
The second-highest debt servicing payment was recorded in November 2006, amounting to $1.52 billion. A review of 2023’s debt servicing data shows considerable variation, with notable spikes in certain months:
- January 2023: $112 million
- February 2023: $288 million
- March 2023: $400 million
- April 2023: $93 million
- May 2023: $221 million
- June 2023: $54 million
- July 2023: $641 million
- August 2023: $310 million
- September 2023: $439 million
- October 2023: $509 million
- November 2023: $368 million
- December 2023: $65 million
Current Debt Profile
As of December 2023, Nigeria’s external debt was approximately $42.495 billion. The World Bank accounts for $14.960 billion of this debt, while China holds $5.167 billion. Overall, the nation’s total public debt was $108.228 billion, indicating a 146% increase from the N39.56 trillion recorded at the end of 2022.
Future Financial Plans
In June 2024, Nigeria expects to secure another $2.25 billion loan from the World Bank. This loan will support two major projects aimed at enhancing economic stability and resource mobilization:
- Nigeria’s Reforms for Economic Stabilisation and Transformation (RESET) Development Policy Financing (DPF): $1.5 billion.
- NG Accelerating Resource Mobilization Reforms (ARMOR) Programme for Results: $750 million.
These funds will be allocated to boost Nigeria’s economic stability and resource mobilization capabilities, further supporting the country’s developmental goals.
Conclusion
Nigeria’s significant debt servicing payments in 2024 and the strategic management of its external debt underscore the government’s commitment to economic stability. The successful repayment of Chinese loans and the anticipated World Bank loan reflect Nigeria’s proactive approach to managing its financial obligations and fostering sustainable development.
