Recent data from the Central Bank of Nigeria reveals that between 2019 and 2024, the Federal Government of Nigeria allocated a total of $15.55 billion to servicing its debts.
The figures indicate a steady increase year by year, with debt service payments climbing from $588.33 million in early 2019 to $2.18 billion between January and May 2024—a notable 270.9% rise compared to the same period five years ago.
Despite government efforts to focus more on domestic borrowing, concerns over the sustainability of Nigeria’s debt remain heightened. Fitch Ratings projects an escalation in external debt servicing to $5.2 billion next year, reflecting ongoing challenges in managing the country’s fiscal obligations.
The largest annual expenditure on debt servicing within this period occurred in 2020, totaling $5.40 billion. In 2023, external debt payments reached $3.5 billion, comprising both market and non-market debt obligations.
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Looking ahead, the Federal Government plans to increase its external borrowing, including significant sums from commercial and concessional loans as outlined in the 2024 budget. Recently, Nigeria secured a $2.25 billion package from the World Bank to support economic reforms aimed at enhancing revenue generation and economic stability.
Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun emphasized that these reforms are crucial for restoring macroeconomic stability and fostering inclusive economic growth.
He described the World Bank support as effectively a grant to bolster Nigeria’s reform efforts and developmental initiatives, particularly in the non-oil sectors.
Overall, the government’s strategy includes enhancing non-oil revenues while safeguarding income from oil and gas resources to ensure sustainable economic progress amidst ongoing fiscal challenges.
