As Nigeria’s foreign debt approaches $50 billion, worries grow.

Nigeria’s external debt is projected to approach $50 billion by the end of the third quarter of 2024, as the Debt Management Office (DMO) prepares to release the latest public debt data.....KINDLY READ THE FULL STORY HERE▶

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

The country’s external debt has grown significantly due to a series of loans from the World Bank and other international lenders.

Notably, Nigeria obtained a $2.25 billion loan in June under the Nigeria Reforms for Economic Stabilisation to Enable Transformation (RESET) and the Nigeria Accelerating Resource Mobilization Reforms (ARMOR) programs.

Additionally, the World Bank approved another $1.57 billion loan for key sectors, including education, healthcare, and water management, with $70 million being a grant.

The African Development Bank (AfDB) approved $500 million in July for the Economic Governance and Energy Transition Support Program (EGET-SP) to accelerate energy infrastructure transformation, while Nigeria also secured $925 million from Afreximbank in June under the crude oil-backed prepayment facility sponsored by the Nigerian National Petroleum Company Limited (NNPCL).

Nigeria’s rising debt has also led to a significant increase in debt service costs. In the first seven months of 2024, debt service payments rose by 53.63%, from $971.47 million to $2.78 billion.

May saw the highest debt service payment at $854.36 million. Fitch Ratings has projected that Nigeria’s external debt service cost could reach $5.2 billion by 2025.

This growing debt burden risks Nigeria’s financial stability, especially with increasing global interest rates and economic challenges.