Nigeria spends N896.56 Billion on Debt Servicing in 3 Months

• Nigeria is spending a huge amount on debt servicing as figures from the country's debt management office reveal
• Between January and March of 2022, debt servicing gulped about N896.56 billion, according to DMO
• Also, the DMO says that the data represents a 109 per cent increase in comparison to the same period in 2021

In three months, the Nigerian government has spent a whopping N896.56 billion on debt servicing, according to the Debt Management Office (DMO).

This has led the country to spend N3.83 trillion on debt repayments in 15 months, a DMO data says.

Debt servicing surpasses increased revenue

The Punch reports a total of N2.93 trillion was spent on servicing debt in 2021, meaning a 109 per cent increase in comparison to 2022.

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Between October and December last year, the country spent about N310.5 billion servicing domestic debts and $2886.35, about N118.9 billion on external debt servicing, making it a total of N429.4 billion.

In the first three between January and March 2022, Nigeria serviced domestic debts with about N668.69 billion, amounting to N896.56 billion.

The debt servicing was based on the official exchange rate fixed by the Central Bank of Nigeria (CBN) and showed that it was N415.22 per dollar as of June 15, 2022.

It shows that the amount Nigeria spent on debt serving increased by 109 per cent from N429 billion in December of 2021 to N896 billion in March 2022.

Nigeria's bloated debt stock

Nigeria’s debt stock increased by N2.04 trillion in the first quarter of 2022, worsening the already bloated Nigeria budget and bringing the total debt burden to about N41.60 trillion from N39.56 trillion witnessed in December 2021.

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Between January and March 2021, Nigeria had spent N612.71bn on domestic debt servicing, while it spent $1bn (N415.22bn) on external debt servicing, giving a total of N1.03tn, The Punch said.

Minister laments burden of debt servicing

Nigeria’s Minister of Finance and National Planning, Zainab Ahmed said that the fuel subsidy regime was destroying Nigeria’s ability to service its debts.

She said Nigeria is struggling to service debts after increased borrowing despite an increase in revenue.

She said expenditure is bloating daily and this has put Nigeria in a difficult place and unable to meet its obligations.

Nigeria spends N977bn on debt servicing in one month, says CBN

Legit.ng reported that the Nigerian government has spent N977.03 on internal debt servicing as of June 2021. This represents about 8.75 per cent in comparison to N898.39 billion in the same period last year.

According to a Nairametrics report, the Financial Markets Department of the Central Bank of Nigeria (CBN) said this in its half-year activity report for 2021.

Nigeria’s domestic debt stock outstanding saw an uptick trend in the first half of 2021 in comparison to the same period in 2020.

Source: Legit.ng