FG spends N6.16 trillion for debt servicing in 16 months, budgets N10.43tn by 2025

This was revealed in the 2023-2025 Medium Term Expenditure Framework & Fiscal Strategy Paper, MTEF/FSP recently released.

The report which covers 2021 and some parts of 2022 noted that the sum of N4.22 trillion was spent on debt servicing in 2021 while N1.94 trillion was spent on the same activity between January and April 2022.

A report by the PUNCH further noted that from December 2021 to March 2022, Nigeria’s debt servicing bill increased from N429 billion to N896 billion indicating a 109 percent increase.

The Nigerian Economic Summit Group and the Open Society Initiative for West Africa had earlier disclosed that Nigeria and 10 other Economic Community of West African States, ECOWAS countries were in some serious debt crises based on debt sustainability analysis while the World Bank described Nigeria’s rising debt as vulnerable and costly.

While breaking down the amount spent on debt servicing in 2021, it was noted that N2.05 trillion went for domestic debt servicing costs, while it costs the nation N946.29 billion to service foreign debt.

The sum of N600 million went to Sinking Fund while N1.22 trillion was interest on Ways and Means - funds lent to the federal government by the Central Bank of Nigeria, CBN.

Details of debt servicing in 2022 went a notch higher as the domestic debt servicing in the first four months cost the nation N1.2 trillion. Within the same period, expenditure on foreign debt service amounted to N334.24 billion while N405.93 billion was paid as interest on Ways and Means.

Amid the surging figures accrued to debt servicing each year, the Federal Government according to the 2023-2025 MTEF/FSP document has further projected that by 2025, debt servicing will cost N10.43 trillion.