Debt Service Claims 70% of Nigeria’s Dollar Outflow in Q1, 2024
In the first quarter of 2024, Nigeria grappled with the weighty burden of debt service payments, which accounted for a staggering 70% of its total dollar outflow.
According to data from the Central Bank of Nigeria (CBN), the country’s foreign debt service payments surged to $1.12 billion during this period, representing a significant escalation from the previous year’s figures. This substantial allocation underscores the mounting strain that external debt places on Nigeria’s financial resources.
CBN data indicates that out of the $1.61 billion total outflows during this period, a substantial portion of $1.12 billion was allocated to servicing external debt. This sizable chunk of financial resources signifies a significant uptick from the previous year, where it accounted for 49% of outflows in Q1 2023.
The breakdown of debt service spending reveals a consistent upward trend, with January witnessing an unprecedented obligation of $560.52 million, dwarfing the corresponding figure from the previous year by nearly fivefold. Although February and March saw moderated spending levels, the amounts remained substantial, further exacerbating the country’s fiscal challenges.
Analyzing the broader picture, Nigeria directed a substantial portion of its dollar outflow towards servicing external debts, with approximately 70% of total outflows dedicated to this purpose. This sharp increase from the previous year’s allocation underscores the growing financial pressure and underscores the urgent need for strategic fiscal management to alleviate the burden of debt service payments on the nation’s economy.
