Nigeria Uses N215.8trn to service external debts in 3 months

The Nigerian government has spent the sum of N215.8 billion on external debt servicing from September to December of 2021. This is an increase of 74.2 per cent compared to N124 billion in the second quarter of 2021, says the Debt Management Office (DMO).

Data shows that the sum of A look at the data shows that a sum of N755.3 trillion has been used to service external debts between January to September of 2021, according to a report by Nairametrics.

Zainab Ahmed, Minister of Finance Credit: Simon Dawson/Bloomberg Source: Getty Images

This represents a 3.9 per cent increase than the N527 trillion spent in the same period last year.

Domestic debt servicing increased very highly by 150.5 per cent from N322.75 billion recorded in the second quarter of 2021 to N808.49 billion in the third quarter of 2021.

This takes the year-to-date domestic debt service to N1.74 trillion from N1.53 trillion recorded in the same period of 2020.

The increase in debt service comes on the back of the significant jump in the country’s debt profile. Nigeria’s external debt rose to $37.96 billion as of Q3 2021, moving from $33.47 billion recorded in the previous quarter.

The 4 billion Eurobond raised from the international debt market to shore up Nigeria’s external reserve market drove the increase above N16.6 trillion.

Nigeria raised the sum of N1.6 trillion in Eurobond in September, a capital increase that was called one of the biggest financial trades in Africa after the order book plateaued at N415 trillion, which allowed the Nigerian government to raise an additional N5 trillion more than the intended N1.2 trillion.

On the other hand, domestic debts also recorded an uptick as federal government domestic debt stock rose to N18.4 trillion, while state domestic debts increased to N4.2 trillion

The Debt Management Office said that Nigeria’s public debt has hit N38.005 trillion at the end of Q3.

The debts include both external and domestic of the federal government, the 36 state governments and the FCT, Abuja.

The debt represents a spike of N2.54 trillion within three months compared to the N35.46 trillion recorded in the same period at the end of June of 2021.