Tony Chukwunyem 
As concerns continue to grow over the sustainability of Nigeria’s public debt, New Telegraph’s findings show that the Federal Government spent a total $3.66 billion on external debt servicing, from January 2022 to June this year. According to latest data on international payments recently released by the Central Bank of Nigeria (CBN), the government spent $1.17 billion to service its external debt obligations in the first half of this year (January to June 2023). Given that an analysis of data obtained from the apex bank shows that external debt servicing gulped $2.49 billion in 2022, it means that between January last year and June this year, the government spent a total of $3.66 billion to service its foreign debt obligations.
A breakdown of the data indicates that at $1.17 billion the amount that the government spent on external debt service in H1’23 was $198.85 million or 14.53 per cent less than the $1.37 billion it spent in the corresponding period of last year. Specifically, the data shows that in January this year, the government spent $112.35 million on external debt servicing; $288.54 million in February; $400.47 million in March; $92.85 million for the month of April; $221.05 million in May and $54.36 million for the month of June.
For H1’ 2022, the data indicates that in January, the government spent $101.30 million on external debt servicing; $323.86 million in February; $345.36 million in March; $82.99 million for the month of April; $178.11 million in May and $336.85 million for the month of June. In its latest quarterly debt report, the Debt Management Office (DMO) stated that Nigeria’s total public debt — Federal and State governments — hit N49.85 trillion at the end of the Q1’23 compared with the sum of N46.25 trillion recorded at the end of December 2022. The DMO’s data shows that Nigeria’s external debt stood at N19.64 trillion ($42.67 billion) as of March 31, 2023, indicating an increase of 5.04 per cent from the end of December 2022, while the domestic debt rose by 9.7 per cent to N30.21 trillion ($65 billion) from N27.55 trillion at the end of December 2022.
The agency also stated that the total debt includes new borrowing by the Federal Government to finance its budget deficit, disbursements from multilateral ($20.66 billion), bilateral ($5.16 billion) lenders and commercial loans which took into account the $15.62 billion in Eurobond.
It further stated there was a $931.3 million in non-interest promissory notes issued to settle the arrears of the Federal Government to local contractors and a $300 million syndicated loan that was arranged by the African Finance Corporation (AFC). According to the DMO, in Q1 ’23, Nigeria had outstanding multilateral loans of $20.66 billion which account for 48.41 percent of total debt outstanding. These include, $3.3 billion from the International Monetary Fund (IMF), $13.84 billion from the International Development Association (IDA), and $488.5 million from the International Bank for Reconstruction and Development (IBRD). Other loans include, $1.57 billion from the African Development Bank, African Development Fund ($972.6 million), Islamic Development Fund ($144 million) and the International Fund for Agricultural Development which stood at $272 million among others. In addition, the data shows that between January and March 2023, while Nigeria spent N874.13 billion on domestic debt servicing, it spent $801.36 million (N368.87 billion) on external debt servicing, thus amounting to a total of N1.24 trillion.
The DMO used the exchange rate of $1/N460.3 for the external debt servicing. Analysts attribute the increase in Nigeria’s public debt to the gov- ernment’s borrowing to finance the deficit, the depreciation of the naira and interest rate hikes. The International Monetary Fund (IMF) recently said that it projects that the Federal Govern- ment would spend 82 per cent of its revenue on interest payments in 2023, adding that Nigeria’s ex- ternal debt (including that of the private sector) will rise to $121.6 billion. Similarly, in its latest Interna- tional Debt Report (IDR), the World Bank said that Nigeria spent $9.6 billion to service foreign debts in 12 years, from 2010 to 2021, noting that the nation’s debt stock is not reflected in the economy.
