Debt Servicing Gulps N13.12trn in 2024 Versus N12.3trn Allocated in Budget

Business Post reports that this was 68 per cent higher than the N7.8 trillion paid by Nigeria to pay interests on debts in 2023 and higher than the N12.3 trillion approved by the National Assembly for last in the 2024 Appropriation Act.

Over the weekend, the DMO revealed that the total debt of the country as of December 31, 2024, stood at N144.67 trillion versus N97.34 trillion a year earlier.

This comprised an external debt of N70.29 trillion and a domestic debt N74.38 trillion.

The agency stated that the significant increase in the debt service was due higher interest rates and increased domestic borrowing as well as rising global interest rates and the depreciation of the Naira, which has made dollar-denominated debt more expensive to service.

About N5.97 trillion was used to funds borrowed by the government from domestic investors, higher than the N5.23 trillion used for the same purpose in 2023 by 14.15 per cent, while N7.15 trillion was used for paying interest on foreign loans, higher than the N2.57 trillion in 2023 by 167 per cent.

Analysis showed that about N4.69 trillion was paid to local investors for giving the federal government money to fund the 2024 budget deficit from the sale of FGN bonds at the local capital market versus the N3.66 trillion recorded a year earlier.

Following the FGN bonds was treasury bills, which recorded the use of N747.15 billion for the payment of interest to investors compared with N326.12 billion in 2023.

Debt servicing for FGN Sukuk gulped N158.43 billion last year, the sum of N6.38 billion was used to pay interest to investors who subscribed to the monthly FGN savings bonds, and N2.18 billion was for FGN green bonds, with N265.86 billion for promissory note principal repayments.

In the 2025 budget, the federal government has allocated about N16 trillion for debt servicing.