Nigeria’s external debt servicing costs skyrocketed by 38% in the first nine months of 2024, hitting a total of $3.53 billion. This represents a significant jump from the $2.56 billion recorded during the same period in 2023, according to data from the Central Bank of Nigeria (CBN).
The sharp rise in debt servicing highlights the growing fiscal pressures on the Nigerian economy, compounded by declining revenues, persistent inflation, and currency depreciation.
A breakdown of monthly debt servicing expenditures reveals notable fluctuations. In January 2024, Nigeria spent $560.52 million, a sharp rise compared to $112.35 million in January 2023. February’s payments stood at $283.22 million, marginally lower than the $288.54 million recorded in the same month of 2023.
March 2024 saw a decline to $276.17 million from $400.47 million in March 2023, reflecting a 31% decrease. However, in April 2024, debt servicing costs surged to $215.20 million, a 132% increase from $92.85 million in April 2023.
The highest monthly expenditure was recorded in May 2024, with $854.37 million spent—an astonishing 287% increase from $221.05 million in May 2023. In June, however, costs dropped slightly to $50.82 million, just below the $54.36 million recorded in June 2023.
The trend in the second half of the year revealed mixed results. Debt servicing fell to $542.50 million in July 2024, a 15% decrease compared to July 2023, and August saw a further drop to $279.95 million, down 10% from the previous year. Nevertheless, September 2024 experienced an uptick, with $515.81 million spent, marking a 17% rise from September 2023.
Cumulatively, Nigeria’s debt servicing expenditures increased by $970 million in 2024 compared to the previous year, reflecting the country’s growing debt obligations.
Financial experts, including Tilewa Adebajo, CEO of CFG Advisory, have raised alarms about the sustainability of the nation’s debt burden. “The current debt profile is unsustainable. The government must prioritize economic growth and job creation to address these mounting challenges,” Adebajo remarked in an interview.
The rising costs of debt servicing call for urgent policy reforms aimed at strengthening Nigeria’s fiscal position and reducing reliance on external borrowing.
