Nigeria directed a substantial 50% of its dollar outflows, totalling $6.11 billion between January and October 2023, to service foreign debts, according to data from the Central Bank of Nigeria (CBN).
The breakdown of payments reveals a consistent commitment, with $112.35 million in January, $288.54 million in February, $400.47 million in March, $92.85 million in April, $221.05 million in May, $54.36 million in June, $641.69 million in July, $309.96 million in August, $439.06 million in September, and $509.73 million in October.
This cumulative expenditure of $3.07 billion marks a notable 38% increase from the $2.22 billion spent during the corresponding period in 2022, underscoring the escalating weight of foreign debt on the nation’s economic landscape.
Further scrutiny of the data reveals that direct remittance accounted for approximately 31% ($1.91 billion) of the total foreign payments ($6.11 billion) during this period, while Letters of Credit (LC) absorbed $1.14 billion (19%) of the dollar payments.
Notably, this signifies a marginal decline of 1% in direct remittance and a 7% decrease in Letters of Credit compared to the corresponding period in 2022.
A Letter of Credit (LC), a payment mode predominantly employed for the importation of visible goods, played a significant role in shaping the distribution of the dollar outflows during the aforementioned period.
