Nigeria spent a staggering N5 trillion on foreign debt servicing within the first nine months of 2024, reflecting the heavy burden of debt on the nation’s finances amid fluctuating exchange rates, data from the Central Bank of Nigeria (CBN) shows.
The CBN’s international payments system data revealed that debt servicing began the year with a cost of $560.5 million in January, amounting to N509.5 billion based on the exchange rate of N909 per dollar.
In February, Nigeria’s foreign debt servicing was $283.3 million, with the naira trading at N1402 per dollar. Consequently, N397.2 billion was spent on debt repayments.
This amount increased slightly in March, with the country spending $276.1 million. Given the average exchange rate of N1512 to a dollar, the debt servicing cost rose to N417.5 billion.
April saw a reduction in debt servicing costs to $215.2 million, converted to N263.6 billion as the exchange rate averaged N1225 per dollar.
However, in May, the debt servicing amount skyrocketed to $854.365 million, translating to N1.216 trillion with an exchange rate of N1424 per dollar, marking the single highest month in debt payments for the period.
In June, Nigeria managed to reduce its foreign debt servicing to $50.8 million, which at an exchange rate of N1492, amounted to N75.8 billion.
This was followed by an increase in July when $542.5 million was spent, amounting to N850.6 billion at an exchange rate of N1568 per dollar.
August saw another sizable payment of $279.954 million, costing the country N444.6 billion as the naira further weakened to an average of N1588 per dollar.
The upward trend continued into September, with Nigeria paying $515.8 million on foreign debt. At an average exchange rate of N1625, the September payment translated to N838.2 billion.
In total, between January and September 2024, Nigeria spent approximately $3.5 billion (N5 trillion) on foreign debt servicing, underscoring the country’s reliance on borrowed funds and its substantial debt obligations.
The nation’s mounting debt servicing costs have raised concerns among economic experts and stakeholders, who warn that such spending significantly limits funds available for critical development initiatives.
Experts argue that this heavy financial burden not only affects Nigeria’s economic stability but also poses challenges to sustainable development and infrastructure growth.
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