The Debt Management Office, DMO, has said that Nigeria’s debt servicing bill went up by 115 per cent to N3.36 trillion in 2022.
DMO said N2.93 trillion was spent on external and domestic debt servicing payments in 2021.
Recall that the DMO had earlier reported that Nigeria’s total debt stock stood at N46.25 trillion as of December 2022.
An analysis of data from DMO showed that the country spent $2.4 billion which was equivalent to N1.07 trillion using the current exchange rate of $/N460 to service its external debt last year.
Domestic debt servicing gulped N2.56 trillion in 2022, with the highest expenditures of N529.88 billion recorded in April.
In 2016, a total of N1.23 trillion was spent to service the country’s domestic debts. The figure for domestic debt servicing rose to N1.48 trillion in 2017.
In 2018, the country’s domestic debt servicing bill rose to N1.8 trillion while the cost of domestic debt servicing came down a bit in 2019 to N1.69 trillion.
In 2020, debt servicing rose again to N1.85 trillion. By 2021, domestic debt servicing rose to N2.05 trillion.
Debt servicing to gulp 123 per cent of 2023 revenue. On the other hand, external debt servicing gulped $353.09 million in 2016. It went up to $464.05 million in 2017 and jumped up to $1.47 billion in 2018.
In 2019, the country spent $1.33 billion on external debt servicing. In 2020, external debt servicing gulped $1.56 billion. By 2021, it became N2.93 trillion.
The amount spent on external debt servicing was calculated using the CBN’s exchange rate for the year. For instance, the naira-dollar average exchange rates for 2016 and 2017 were N197 and N305 respectively. It was N305 in 2018 and N360 in 2019. It closed at N380 and N420 in 2020 and 2021 respectively.
The International Monetary Fund has warned that debt servicing might gulp 100 per cent of the federal government’s revenue by 2026 if the government fails to implement adequate measures to improve revenue generation.
