Nigeria Spends N1.33 Trillion on Domestic Debt Servicing in 6 Months
- The Nigerian government has spent over N1 trillion in domestic debt servicing in the last six months of this year, representing a 42.5 percent increase
- Also, the country's total debt profile stands at a staggering $103.31 trillion, with external debt contributing the most significant chunk
- For the last 13 years, Nigeria has been running on a deficit with debt service to revenue at an abysmally low
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The Nigerian government has spent about N1.33 trillion to service domestic debt in the first six months of 2022.
The debt servicing represents an increase of 42.5 percent compared to N935.46 billion in 2021.
Source: UGC
Nigeria's revenue dwindling
Data from Debt Management Office (DMO) says that compared to the first six months of 2021, domestic debt servicing spiked by 19.2 percent from 1.19 trillion.
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The total debt stock of Africa's biggest economy increased to $103.31 billion as of June 30, 2022, from N41.61 trillion compared to the previous quarter.
Data shows that Nigeria's total debt stock comprises domestic debt, which stands at $63.25 billion, and external debt at $40.06 billion.
According to reports, there has been an increase in Nigeria's debt profile following revenue shortfalls and the economy running on a deficit in the last 13 years.
An analysis of the report shows that the highest amount spent on debt servicing was in April 2022, at N529.881 billion, followed by N378.44 billion spent in May 2022.
The Federal Government of Nigeria's (FGN) bonds accounted for the significant share with N15.19 trillion, representing 72.53 percent of the total debt, and Treasury Bills at N4.5 trillion, a 21.5 percent increase.
FGN Sukuk accounts for 2.92 percent at N612.56 billion, promissory note at N514.94 billion, while Treasury Bills stand at N75.99 billion and FGN Savings Bond at N20.87 billion.
Hike in interest rate to increase Nigeria's debt servicing
The recent increase in interest rates by the Central Bank of Nigeria (CBN) would spike Nigeria's debt servicing.
The rate hike is expected to spiral across other debt instruments issued by DMO and the CBN on behalf of the Nigerian government.
According to the DMO, Nigeria's debt to GDP stands at 23 percent, below the country's self-imposed 40 percent limit.
Nigeria spends N896.56 billion on debt servicing in 3 months
Recall that Legit.ng reported that 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.
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.
Source: Legit.ng
