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

The Nigerian government has spent a total of $1.8 billion between January and July 2023 for debt servicing as the country struggles to pay off the piling national debts.

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.