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Nigeria spends $3.5 billion on debt service in 2023, up 55% YoY



Nigeria incurred a debt service of $3.5 billion for its external loans in the fiscal year ended 2023 according to data from the Central Bank of Nigeria (CBN).

The data is contained in the central bank’s latest Quarterly Statistical Bulletin.

This $3.5 billion spent represents a 55% increase from the $2.6 billion incurred in 2022 as debt service related payments for the country’s external debts.

Data from the Debt Management Office indicates Nigeria has a total external debt portfolio of $42.29 billion up from $41.69 billion in 2022.

According to the data published by the apex bank, Nigeria incurred $801.36 million, $368.26 million, $1,390.72 million and $943.17 million in the first, second, third and fourth quarter respectively.

This substantial increase in debt servicing demands a large portion of Nigeria’s annual budget, restricting government spending in critical sectors such as health and education.

It also poses a risk to the nation’s economic growth and may deter foreign investment, essential for economic stability.

Nigeria’s external debt, which is mostly denominated in dollars, has been rising in recent years as the country faced multi-year economic headwinds triggered by the Covid-19 Pandemic.

Nigeria also repaid a $500 million in Eurobond loans mid last year obtained 6 years ago at a coupon rate of 6.375% per annum.

Eurobond debts are typically paid out of the country’s external reserves or via a special fund designated for external bond repayments.

According to the DMO, the redemption now means Nigeria has now repaid a total of $1.8 billion in securities in the International Capital Market (ICM) over the past six years.

The Nigerian government has been actively seeking to address these issues through a variety of measures. For example,