Nigeria's debt services jump by 22.3%, hits $1.8 billion in 7 months

According to the latest international payments data from the Central Bank of Nigeria (CBN), the update was reported during the first seven months of 2023 and it indicated a 22.3% increase when compared to the $1.48 billion reported in the first seven months of 2022. 

A further monthly breakdown of the report showed that in January 2023, the sum of $112.3million was spent for debt servicing and when compared on a month-on-month basis, the amount was 146.17% higher than the $45.64million spent in December 2022.

In February, the figure increased by 156.8% to $288.54 million. The Federal Government also spent $400.47 million in March while the amount dropped significantly to $92.85 million in April.

The CBN report also stated that in May and June, the sum of $221.05 million and $54.36 million was spent on debt services respectively.

The highest amount spent for debt services in 2023 was recorded in July which was $641.7 million.

On a quarterly basis, the sum of $801.36 million was spent on debt services in the first quarter of 2023 (Q1), and when compared with the figures reported in Q1, 2022, there was a 4.0% increase from $770.52 million spent during the period under review.

Nigeria's debt profile has been an issue of concern to both experts and most international finance bodies.

As of 2022, Nigeria’s debt service-to-revenue ratio had hit 80.6%, a figure which was far higher than the World Bank’s suggested 22.5% for low-income countries like Nigeria.

According to the International Monetary Fund (IMF) Nigeria’s debt services have been projected to take up about 82% of the country’s revenue in 2023 

This position was also corroborated by KPMG, as the professional firm recently warned that Nigeria’s debt service to revenue ratio may exceed 100% in 2023.

The firm further warned that the risk of sliding into critical debt servicing problems was very high for the country unless there was a proactive step to significantly increase revenue.