Nigeria Successfully Repays China, World Bank, Others Over $2bn Debt, Borrows Another $2bn

• The CBN data has shown that Nigeria spent over $2 billion on external debt servicing in the first five months of 2024
• The amount represents a significant increase from the previous year, nearly doubling the debt service expenditure for the same period in 2022
• Wale Edun, the minister of finance and coordinating minister of the economy, has announced the approval of a new loan from the World Bank

Legit.ng journalist Dave Ibemere has over a decade of business journalism experience with in-depth knowledge of the Nigerian economy, stocks, and general market trends

The latest data from the Central Bank of Nigeria (CBN) reveals that the Nigerian government has spent $2.19 billion to repay foreign debts to countries and financial institutions.

This amount is 90% higher than the $1.12 billion recorded in the same period in 2023.

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A breakdown of the data showed that the debt service payments were recorded from January to May 2024.

Nigeria repays its debts

According to CBN data analysed by Legit.ng, the Tinubu-led administration spent $560.52 million on debt servicing in January 2024, significantly higher than the $112.35 million paid in January 2023.

In February 2024, the amount spent on debt was $283.22 million, nearly the same as the $288.54 million spent in February 2023.

The debt service payment in March 2024 stood at $276.17 million, lower than the $400.47 million spent in March 2023. Debt repayment continued in April 2024, with the Tinubu government committing $215.2 million to debt service, higher than the $92.85 million spent in April 2023.

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The highest debt service payment was recorded in May 2024, amounting to $854.37 million, also higher than the $221.05 million spent in May 2023.

More debt to be paid by Nigeria

Nigeria has contracted several debt obligations from external sources, some of which are China, the World Bank, the African Development Bank, the Islamic Development Bank, Japan, France, and others.

A check on the Debt Management Office (DMO) data showed that the outstanding total public debt (external and internal) summed up to $108.22 billion or (N97.34trn) as of December 2023.

The external debt makes up $38.21 billion, 39.26%, and domestic debt makes up $59.12 billion, 63.62%.

Nigeria's debt set to increase

While Nigeria repays some of its old loans, it accumulates new ones.

Wale Edun, the Minister of Finance and Coordinating Minister of the Economy, has announced the approval of two major "financial support packages" by the World Bank, valued at $2.25 billion.

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According to a statement released on Thursday, June 13, the new loan is part of President TinuTinubu'soing efforts to stabilise the economy, reposition it for sustained and inclusive growth, and provide urgent support to the poor and vulnerable.

Legit.ng believes that when the next debt data is released, Nigeria's public debt will be increased past N100 trillion adding more burden to future generations.

IMF says Nigeria not in debt distress

Legit.ng previously reported that despite Nigeria sitting on N87 trillion debt profile, the International Monetary Fund (IMF) has said that AfriAfrica'sgest economy is not in debt distress.

The IMF said this on Friday, October 13, 2023, at the ongoing IMF/World Bank Conference in Marrakesh, Morocco.

According to the Debt Management Office (DMO), a BusinessDay report says that NigeNigeria'slic debt hit N87 trillion in June 2023 and is estimated to cross 37% of GDP by the end of the year.

Source: Legit.ng