- Nigeria could not service Chinese loans in the second quarter of this year
- However, the country has spent about N2.34 trillion in debt servicing in the first half of 2023
- The amount is a rise of 75.29% or N37.53 trillion compared to N49.85 trillion recorded at the end of March 2023.
Nigeria’s debt servicing spending declined to N849.58 billion in the second quarter of N2023.
The figure drops 43.04% compared to N1.49 trillion spent in the first quarter of 2023 on debt servicing.
Credit: DMO
Source: UGC
DMO amount spent on debt servicing in 2023
According to data from the Debt Management Office (DMO), between January and March 2023, Nigeria spent N874.13 servicing domestic debt, while it spent $801.36 million on external debt servicing, a total of N1.24 trillion.
But between April and June 2023, Nigeria spent N565.88 billion on domestic debt servicing and $368.26 million on external debts, bringing it to N1.24 trillion.
The DMO said it used the exchange rate of N770.38 for the debt servicing calculations.
In six months, Nigeria spent N2.34 trillion on debt servicing.
TopLatestNews reported that Nigeria spent little on Chinese loans in the second quarter of 2023.
Punch said Nigeria spent about $131.13 million servicing loans from Exim Bank of China in the first quarter of 2023.
FG’s debt to CBN balloons national debt to N87 trillion
Despite the decline in the cost of debt servicing, Nigeria’s total public debt reached N87.38 trillion at the end of June 2023.
The figure is an increase of 75.29% or N37.53 trillion compared to N49.85 trillion recorded at the end of March 2023.
DMO stated that the debt included the N22.71 trillion Ways and Means Advances of the Central Bank of Nigeria (CBN) to the Federal government.
DMO also revealed that other additions to the debt profile were due to new borrowings by the Federal and the sub-nationals from local and external sources.
This figure showed an increase in both and external debt within three months.
The domestic debt increased by 79.18% from N30.21 trillion, while the external debt increased by 69.28% from N19.64 trillion in the first quarter of 2023.
Nigeria’s current revenue cannot support new borrowings
Per the DMO’s Debt Sustainability Analysis Report, the projected revenue of N10 trillion for 2023 could support fresh borrowings.
The DMO said Nigeria’s projected debt service to revenue ratio of 73.5% for 2023 was high and may not support debt.
DMO noted that the government’s current revenue profile could not support higher borrowing.
The development follows a recent statement from President Tinubu that Nigeria needs to refrain from using 90% of its revenue on debt servicing.
Nigeria’s debt stock hits N82 trillion amid CBN’s naira devaluation
TopLatestNews reported that Nigeria’s public debt has risen to N82 trillion from N77 trillion before the Central Bank of Nigeria (CBN) exchange rate unification, announced on Wednesday, June 14, 2023.
According to a press release by the CBN, all exchange rate windows are collapsed into the Importers and Exporters (I&E) window, showing a merger of the multiple exchange rates.
The unification has seen the naira fall to N664 per dollar and has attracted severe consequences for the nation’s economy, including a spike in public debt.
Source: TopLatestNews
