DMO: Nigeria fulfils debt service obligations of Chinese, World Bank loans despite spike

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Nigeria has consistently and successfully serviced the Chinese, World Bank loans even as debt servicing increased by 277.64 Per Cent, the Debt Management Office stated.

According to data from the DMO, Nigeria is facing a rise in debt servicing, showing that debt servicing jumped by 277.64% in the third quarter of 2023.

A report by the DMO shows that Nigeria spent about 277.64% on external debt servicing in Q3 of 2023, indicating that external debt servicing stood at $368.26 million in the second quarter of 2023.

Top three external debt service expenditure figures increased to $1.39 billion, showing a 277.64% rise in the three months under review.

The DMO used N768.93 per dollar as the exchange rate in calculating the naira value for external debt servicing, showing that the top three external debt service expenditure items for the third quarter of 2023: Eurobonds at $943.661 million, the World Bank’s International Development Association (IDA) at $212.038 million, and the Exim Bank of China at $137.191 million.

The report stated that external debt declined due to the redemption of a $500 million Eurobond and payment of $413.859 million as the primary repayment and the amount of $3.4 billion loan obtained from the International Monetary Fund (IMF) during COVID-19 in 2020.

The DMO data did not show any debt service to the IMF.

However, Nigeria spent about N5.20 trillion on debt servicing in the first nine months of 2023, including N3.23 trillion in domestic debt and $2.56 billion in external debt servicing.

Domestic debt servicing increased by 216.76% per a quarterly analysis from N565.88 billion in the second quarter of 2023 to N1,79 trillion the following quarter.

Nigeria’s domestic debt stock rose by N1.80 trillion to N50.196 trillion as external debt stock dropped by $1.57 billion in Q3 of 2023 from $43.16 billion to $41.59 billion as of September 30, 2023.

Despite Nigeria’s debilitating N87 trillion debt profile, the International Monetary Fund (IMF) has said that Africa’s largest economy is not in debt distress.

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