Debt servicing consumes N2.34 trillion in a year. According to research by The PUNCH, Nigeria’s outlay on debt servicing decreased to N849.58 billion in the second quarter of 2023.

    This was a reduction of 43.04 percent from the N1.49 trillion paid on debt servicing in the first quarter of 2023.

    Data from the Debt Management Office shows that between January and March 2023, Nigeria spent N874.13 billion on servicing domestic debt and N617.35 billion on servicing overseas debt, for a combined total of N1.24 trillion.

    debt managment
    debt managment

    However, Nigeria spent a total of N1.24 trillion between April and June 2023 on servicing its debts, including N565.88 billion for domestic debt and $368.26 million (N283.7 billion) for external debt.

    Read also>>> NNPCL reports a N18.4 billion Q1 profit, Following the acquisition of OVH

    For servicing external debt, the DMO’s exchange rate of $1 to N770.38 was applied.

    N2.34 trillion was spent on servicing the nation’s debt in just six months.

    The PUNCH also noted that no money was spent in the first quarter of 2023 servicing Chinese debts, in contrast to the previous quarter when Nigeria spent roughly $131.13 million doing so.

    At the end of June 2023, Nigeria’s total public debt reached N87.38 trillion, notwithstanding the decline in the cost of debt servicing.

    The amount was up 75.29 percent, or N37.53 trillion, from the N49.85 trillion recorded at the end of March 2023.

    The N22.71 trillion Ways and Means Advances of the Central Bank of Nigeria to the Federal Government, according to the DMO’s announcement, were included in the debt.

    The statement also noted that other additions to the debt stock were new borrowings by the Federal Government and the sub-nationals from local and external sources.

    dmo leader
    dmo leader

    There was a significant increase in both domestic and external debt within three months.

    The domestic debt rose by 79.18 per cent from N30.21tn, while the external debt rose by 69.28 per cent from N19.64tn in Q1 2023.

    In its 2022 Debt Sustainability Analysis Report, the DMO warned that the Federal Government’s projected revenue of N10tn for 2023 could not support fresh borrowings.

    The office claimed that the projected government’s debt service-to-revenue ratio of 73.5% for 2023 was high and posed a risk to the sustainability of the debt.

    It stated that larger levels of borrowing could not be supported by the government’s current revenue profile.

    The Federal Government expects to spend 82% of its revenue on interest payments in 2023, according to latest data from the International Monetary Fund.

    Additionally, the World Bank predicted that in 2023, the Federal Government’s earnings would be consumed by debt servicing to the tune of 123.4%.

    Recently, President Bola Tinubu stated that just 90% of the nation’s income could be used to pay off its debt.

    If that persisted, he said, the nation would be destroyed.

    Explore more news>>>