In the second quarter of 2023, Nigeria’s spending on debt servicing decreased to N849.58 billion, which represents a 43.04% decrease compared to the N1.49 trillion spent on servicing debt in the first quarter of 2023, according to data from the Debt Management Office (DMO).
Between January and March 2023, Nigeria spent N874.13 billion on domestic debt servicing and $801.36 million (N617.35 billion) on external debt servicing, totaling N1.24 trillion. However, between April and June 2023, Nigeria spent N565.88 billion on domestic debt servicing and $368.26 million (N283.7 billion) on external debt servicing, once again totaling N1.24 trillion.
Despite the decrease in debt servicing costs, Nigeria’s total public debt increased to N87.38 trillion by the end of June 2023, representing a 75.29% increase compared to the N49.85 trillion recorded at the end of March 2023.
The debt includes the N22.71 trillion Ways and Means Advances provided by the Central Bank of Nigeria to the Federal Government, as well as new borrowings by the Federal Government and sub-national entities from local and external sources.
The rising debt levels have raised concerns about Nigeria’s ability to service its debt, with high debt service-to-revenue ratios and warnings from international financial institutions about the sustainability of the country’s debt levels.
President Bola Tinubu recently expressed concerns that the country could not continue servicing its debt with 90% of its revenue, suggesting that this path could lead to destruction.