Nigeria: Foreign debt service costs climb to $2.19bn in May 2024

Latest data released by the Central Bank of Nigeria (CBN) shows that by the end of May 2024, Nigeria’s debt services and payments reached $2.19 billion, a sharp rise from $1.12 billion recorded in the same period in 2023.

According to the data, in January 2024, Nigeria’s debt servicing costs amounted to $560.52 million, an increase of 399 per cent compared to $112.35 million in January 2023.

February 2024 saw a slight decrease in debt servicing costs, totalling $283.22 million. This is a 1.8 per cent decline from $288.54 million in February 2023.

In March 2024, debt payments were recorded at $276.17 million, a 31 percent decrease from $400.47 million in March 2023. However, April 2024 witnessed a substantial increase in debt servicing payments, which rose to $215.20 million from $92.85 million in April 2023.

The month of May 2024 saw a further spike in debt servicing costs, reaching $854.37 million compared to $221.05 million in May 2023. This represents a significant 286 per cent increase, highlighting the growing fiscal pressure on Nigeria’s economy.

According to data from the CBN, out of the $3.31 billion in total outflows made during this period, about $2.19 billion was directed towards servicing external debt.

The soaring costs of servicing foreign debt have significant implications for Nigeria’s economy, potentially diverting resources away from critical sectors such as healthcare, education, and infrastructure, exacerbating socio-economic challenges.

The World Bank recently expressed deep concerns over the escalating debt service costs that are burdening developing countries worldwide.