- Nigeria’s debt service costs increased by N60 billion to N3.57 trillion in the third quarter of 2024
- The Debt Management Office said external debt service costs was N2.14 trillion in Q3 2024
- Domestic debt service costs reduced to N1.43 trillion in Q3 2024
The Debt Management Office (DMO) says Nigeria’s total debt service costs rose by N60 billion to N3.57 trillion in the third quarter (Q3) of 2024.
According to the latest data from the DMO, the debt service costs represent a 1.71 per cent increase from N3.51 trillion recorded in the second quarter (Q2) of 2024.
The increase in debt service costs reflects the impact of higher external debt service obligations and naira depreciation on borrowings.
External debt service costs reached N2.14 trillion
According to the data, the cost of servicing external debts in Q3 amounted to $1.34 billion, translating to N2.14 trillion with the DMO’s September exchange rate of N1,601.03/$.
The amount represents an increase of 29.70 per cent in naira terms or 19.44 per cent in dollar terms compared to $1.12 billion (N1.65 trillion) in Q2 with the DMO’s June rate of N1,470.19/$.
The rise was driven by higher obligations to multilateral and bilateral creditors, as well as interest payments on commercial loans.
The DMO data showed that payments for multilateral debt stood at $712.66 million in Q3, a 6.04 per cent increase from $672.01 million in Q2.
Multilateral debt made up 53.26 per cent of total external debt service costs.
The data disclosed that payments to the International Monetary Fund (IMF) increased to $406.98 million from $404.24 million in Q2.
For bilateral debts, payments rose by 325.52 per cent quarter-on-quarter to $186.92 million. Obligations to China’s Exim Bank were the largest drivers of the increase and accounted for $182.04 million in Q3 compared to zero in Q2.
Increases were recorded for other bilateral creditors, such as the Exim Bank of India and the French Development Agency.
Nigeria’s debt service obligations to commercial loans, including Eurobonds, increased by 8.48 per cent from $404.46 million in Q2 to $438.68 million in Q3.
Eurobond interest payments dominated this category at $427.72 million.
Domestic debt service declined to N1.43 trillion
According to the data, domestic debt servicing fell to N1.43 trillion in Q3 from N1.86 trillion in Q2.
Domestic debt servicing costs were dominated by Federal Government bonds, accounting for 87.41 per cent of the obligations at N1.25 trillion. This was however a decline from N1.68 trillion in Q2.
Interest payments on Nigerian Treasury Bills (NTBs) reached N168.53 billion in Q3 from N107.48 billion in Q2, representing a 56.8 per cent increase.
Also, the Federal Government of Nigeria Sukuk bonds recorded N8.28 billion in interest payments, while the Federal Government savings bonds saw N1.83 billion in interest.
There were no recorded repayments of principal on promissory notes or other debt instruments in Q3.
Nigeria’s debt servicing surges to $3.53 billion in first 9 months of 2024
Meanwhile, TheRadar earlier reported that the cost of servicing Nigeria’s external debt increased from $2.56 billion in 2023 to $3.53 billion in the first nine months of 2024.
According to the International Payment Data of the Central Bank of Nigeria (CBN), the amount represents a year-on-year increase of $970 million or 38 per cent.
