Nigeria’s Foreign Debt May Hit $50bn

Nigeria’s external debt stock is expected to hit $50 billion as the Debt Management Office (DMO) prepares to release the latest public debt data– third quarter (Q3) 2024.

As of March 31, 2024, Nigeria’s total public debt stock stood at N121.67 trillion ($91.46 billion), comprising domestic component of N65.65 trillion ($46.29 billion), while external debt was N56.02 trillion ($42.12 billion).

Fast forward to September 30– the  end of the third quarter of 2024, the country has procured series of external loans from the World Bank and other multilateral agencies.

According to the DMO figures, as of March 31, 2024, Nigeria’s debt to the World Bank alone amounted to a total of $15.59 billion.

Since then, the federal government had in June obtained a $2.25 billion World Bank facility for the Nigeria Reforms for Economic Stabilisation to Enable Transformation (RESET) Development Policy Financing Programme (DPF) and Nigeria Accelerating Resource Mobilization Reforms (ARMOR) Programme-for-Results (PforR). 

The combined $2.25 billion package was reportedly designed to provide immediate financial and technical support to Nigeria’s urgent efforts to stabilise the economy and scale up support to the poor and most economically at risk. 

A few weeks ago, the World Bank also okayed a $1.57 billion loan for three new projects in Nigeria to support the country in addressing governance challenges in education and healthcare, improving primary healthcare services as as increasing resilience to climate change through enhanced dam safety and irrigation infrastructure.

Out of the total package, the sum of $70 million is a grant in what the global development bank described as part of broader efforts to improve key sectors such as education, healthcare, and water management, while also tackling poverty and boosting productivity.

The African Development Bank (AfDB) had also in July approved $500 million for Nigeria to finance the first phase of the Economic Governance and Energy Transition Support Program (EGET-SP), a new programme aimed at accelerating transformation of the country’s electricity infrastructure and improving access to cleaner sources of energy.

Nigeria in June equally secured an additional disbursement of $925 million from Afreximbank under the syndicated $3.3 billion crude oil-backed prepayment facility sponsored by the Nigerian National Petroleum Company Limited (NNPCL).

There are also a number of other multilateral and bilateral loans procured by Nigeria after the last foreign debt data released for the second quarter of 2024.

Records show that Nigeria’s debt service cost in the first seven months of 2024 posted  a 53.63 per cent increase, from $971.47 million, to $2.78 billion, up from the $1.81 billion posted in the same period in 2023.

According to the Weekly International Payments data available on the Central Bank of Nigeria’s website as of September, the external debt service cost gulped the highest amount in May at $854.36 million followed by $560.51 million in January and $542 million in July.

The months of February, March and April were below $300 million with the lowest amount paid in June 2024 at $50.82 million

Global rating agency, Fitch had projected that Nigeria external debt service cost would hit $5.2 billion by 2025.

Nigeria has so far secured about $6.2 billion from the World Bank alone since the emergence of the current administration under President Bola Ahmed Tinubu.

Ndubuisi Francis

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