Good News as Sovereign Debt Servicing Dips From 97% to 65% in Nigeria

• Tinubu noted that the nation's debt was previously paid down with 97% of government earnings
• He added that the percentage has now been reduced to 65% to indicate economic recovery
• FG advised that Nigeria has never been behind on its domestic or international debt

Legit.ng journalist Zainab Iwayemi has 5-year-experience covering the Economy, Technology, and Capital Market.

In response to the recent decline in sovereign debt servicing from 97% to 65% of government revenue, President Bola Tinubu said the change was an indication of the country's economic recovery.

During Monday's swearing-in ceremony for seven new ministers in Abuja, Tinubu declared war on looters and promised to take smart measures to protect the country's wealth from theft.

He also emphasized the vital role these leaders will play in helping Nigeria navigate its economic difficulties, highlighting the significance of their commitment and foresight during this crucial time.

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While highlighting the dire state of the nation's finances, Tinubu pointed out that 97% of government revenue was previously used to pay down the nation's debt, Daily Sun reported.

“For us, it was a challenge when the nation was servicing its debt with 97 percent of its revenue; it was nothing but the end of the cliff,” he stated.

Declaring that this ratio has now been lowered to 65 percent, he emphasized that Nigeria has never fallen behind on its domestic or international debt.

“We have our head above water,” he declared.

President Tinubu expressed optimism about Nigeria’s economic recovery, stating, “Economic recovery is on the horizon. We are on a good path to realize our dreams, not just for us, but for our children and grandchildren.”

He acknowledged the significant challenges ahead as the government works to re-engineer and retool the nation’s economic framework.

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While recognising the rising cost of living, Tinubu assured that his administration has fulfilled its commitment to implement a new minimum wage across the board.

“Yes, the cost of living has gone up, but we have satisfied the obligation of paying a new minimum wage,” he said.

Despite global economic challenges affecting many nations, including rising crime rates in Europe and America due to pandemic-related disruptions, Tinubu urged resilience among citizens.

Nigeria successfully repays foreign debts

Legit.ng reported that the Central Bank of Nigeria (CBN) reported an increase in international payments of $3.31 billion in the first five months of 2024.

The figure represents a sharp increase of 30.8% rise from the $2.53 billion recorded during the same period in 2023.

The rise in payments was driven by a 96.3% increase in foreign debt servicing, which accounts for $2.19 billion or 66.1% of the total costs.

Source: Legit.ng